not exceeding 100 million ounces upon acceptance by it of a promise to repay signed only by representatives of the Government of India. Sincerely yours, EDWARD R. STETTINIUS, JR. 845.515/6-1344 The Administrator of the Foreign Economic Administration (Crowley) to the Under Secretary of State (Stettinius) WASHINGTON, June 13, 1944. DEAR MR. STETTINIUS: In accordance with your letter of June 6, 1944, concerning the lend-leasing of 100,000,000 ounces of silver for use by the Government of India, an agreement was executed on June 8 with the Agent General for India governing this transaction and containing the promise of the Government of India to return the silver on an ounce-for-ounce basis after the end of the existing emergency. A copy of the agreement is enclosed for your information.. Sincerely yours, LEO T. CROWLEY [Annex] Special Lend-Lease Agreement Regarding Silver, Concluded Between the United States and the Government of India The Government of the United States, through the Foreign Economic Administration, and the Government of India, through the Agent General for India, recognizing that the maintenance of an adequate supply of silver coinage and the stabilization of prices by the Government of India are essential to the effective continuance of the war effort, hereby agree as follows: ARTICLE I The Government of the United States agrees to make available to the Government of India, under the Act of Congress of the United States of March 11, 1941,57 as amended, from stocks of United States Treasury silver, such amounts of silver, totalling not in excess of 100,000,000 ounces, as the Government of India may request from time to time prior to the end of the existing emergency as determined by the President of the United States, for use for coinage purposes. and as a stabilization reserve; provided, however, that the Government of the United States may reduce the total quantity of silver to be made available to the Government of India in the event that the war needs of the United States for silver so require. 57 55 Stat. 31. ARTICLE II The Government of India agrees that it will not sell any silver made available to it under Article I outside the territorial limits of India. ARTICLE III The Government of India agrees to return to the United States Treasury within five years after the end of the existing emergency, as determined by the President of the United States, an amount of silver bullion in an equivalent or higher fineness and equivalent in quantity and form to the silver made available to the Government of India under Article I; provided, however, that if the conditions of the world supply of silver make it advisable, such period may be extended by agreement of the parties hereto for an additional two years. ARTICLE IV The quantity of silver referred to in Article I of this Agreement shall include the 9,999,998.85 ounces of silver transferred to the account of the Government of India pursuant to the requisition dated March 9, 1944 and numbered 20839, and this Agreement shall supersede the Agreement of the Government of India in a letter dated March 15, 1944 from the India Supply Mission to the Foreign Economic Administration concerning the aforesaid 9,999,998.85 ounces of silver. Signed at Washington in duplicate on this 8th day of June, 1944. For the Foreign Economic Administration: For the Government of India: LEO T. CROWLEY 845.515/7-1544 The British Chargé (Campbell) to the Secretary of State No. 437 WASHINGTON, July 15, 1944. Ref. 430//44 SIR: I have the honour to call your attention to the agreement signed on June 8th, 1944 between the Foreign Economic Administration on behalf of the Government of the United States and the Agent General for India on behalf of the Government of India, whereby the United States Government undertakes to make available to the Government of India under the Act of Congress of the United States of March 11th, 1941, as amended, from stocks of United States Treasury silver, such amounts of silver totalling not in excess of 100,000,000 ounces as the Government of India may request from time to time prior to the end of the existing emergency as determined by the President of the United States. The purpose of this agreement is to implement the anti-inflation policy of the Government of India, which policy, it has been agreed, is essential to the effective continuance of the war effort. In connection with the obligations of His Majesty's Government in respect of this agreement, I would further call your attention to the letter which His Majesty's Ambassador addressed to you, dated March 21st, 1944, and your reply to that letter dated April 7th, 1944. Inasmuch as it has now been agreed that an exchange of notes would constitute a satisfactory recognition of the obligations of His Majesty's Government in respect of this agreement, I have the honour to inform you that, in the event of the Government of India failing to return to the United States Treasury any part of the silver made available to it by the United States Government under the terms of this agreement, His Majesty's Government in the United Kingdom will take such steps as may be necessary to effect the delivery to the United States Treasury of such amounts of silver and within such a period as is required for the implementation of this agreement. His Majesty's Government would be glad to have your assurance that the Government of the United States would recognise that should His Majesty's Government in the United Kingdom be called upon at any time to play any part in fulfilling the Government of India's agreement with the Government of the United States, the action of His Majesty's Government in the United Kingdom in the matter shall be regarded as discharging pro tanto the obligations of the Government of India. I have the honour [etc.] RONALD I. CAMPBELL 845.515/7-1544 The Acting Secretary of State to the British Chargé (Campbell) WASHINGTON, July 28, 1944. SIR: I have the honor to acknowledge the receipt of your note of July 15, 1944 setting forth the undertaking of His Majesty's Government in the United Kingdom in respect of the recently signed agreement between my Government and the Government of India concerning the provision by my Government of 100,000,000 ounces of silver for the purposes of combatting inflation in India. I take pleasure in noting that His Majesty's Government in the United Kingdom undertakes that in the event of the Government of India failing to restore to the United States Treasury any part of the silver which had been made available to it by the United States Gov ernment under the terms of the above-mentioned agreement, His Majesty's Government in the United Kingdom will take such steps as may be necessary to effect the delivery to the United States Treasury of such amounts of silver and within such a period as is required for the implementation of the said agreement between my Government and the Government of India. My Government will, as you suggest, recognize that should His. Majesty's Government in the United Kingdom be called upon to play any part in fulfilling the Government of India's agreement with my Government, the action of His Majesty's Government in the United Kingdom in the matter would be considered as discharging pro tanto the obligations of the Government of India.58 Accept [etc.] EDWARD R. STETTINIUS, JR. EXCHANGE OF MESSAGES BETWEEN PRESIDENT ROOSEVELT AND BRITISH PRIME MINISTER CHURCHILL REGARDING A PROPOSED SPECIAL ALLOCATION OF SHIPS TO CARRY WHEAT TO INDIA FROM AUSTRALIA 59 845.48/368: Telegram The British Prime Minister (Churchill) to President Roosevelt 60 665. The food situation in India and its possible reactions to our joint operations is of serious concern to me. At least 700,000 people died last year as a result of a serious famine which we had in Bengal. There is a good rice crop this year, however, an acute wheat shortage faces us which is further aggravated by the serious damage which has been inflicted on the Indian spring crops by unprecedented storms. Any possible surplus of rice even if it can be taken from the peasants cannot overcome India's shortage. The problem has been increased by our recent losses in the Bombay explosion.61 58 Subsequent exchanges of notes, under the same terms as agreed upon here, made provision for further loans of silver to the Government of India as follows: the British note of December 29, 1944, and the American reply of January 19, 1945 (845.515/12-2944), covering a recent requisition for silver to the Government of India in the amount of 20,000,000 ounces; the British note of April 30 and the American reply of May 7, 1945 (845.515/4-3045), covering a recent requisition for silver to the Government of India in the amount of 45,000,000 ounces; and the British notes of July 4/July 30 and the American reply of July 19, 1945 (845.515/7-445, 845.515/7-3045), covering a recent requisition for silver to the Government of India in the amount of 41,000,000 ounces. 50 For previous correspondence relating to the food situation in India see Foreign Relations, 1943, vol. IV, pp. 296 ff. 60 Transmitted to the Secretary of State under a White House memorandum of April 30 in which the Secretary was directed by President Roosevelt to prepare a draft reply "after consultation with the Joint Chiefs of Staff." 61 On April 14 two British munitions ships blew up at the Victoria Docks at Bombay, devastating the docks and adjacent areas, causing an estimated loss of 2,000 lives. The gravest warnings have been given to me by Wavell 62 who is very anxious about our position. If he is to cope with the situation and meet the needs of the United States, British and Indian troops as well as the civil populations particularly in the large cities, he estimates that he will need imports of about one million tons this year. Unless arrangements are made promptly to import wheat requirements, Mountbatten 63 considers the situation so serious that he will have to release military cargo space of Southeast Asia Command in favor of wheat and to advise Stilwell & formally that it will also be necessary that he arrange to curtail American military demands for this purpose. 64 During the first 9 months of 1944, I have been able to make arrangements for shipping 350,000 tons of wheat to India from Australia by cutting down military shipments and by other means. This is the shortest haul. I see no way of doing more. We have the wheat (in Australia) but we lack the ships. I have had much hesitation in asking you to add to the great assistance you are giving us with shipping but a satisfactory situation in India is of such vital importance to the success of our joint plans against the Japanese that I 'am impelled to ask you to consider a special allocation of ships to carry wheat to India from Australia without reducing the assistance you are now providing for us, who are at a positive minimum if war efficiency is to be maintained. For some time I have resisted the Viceroy's request that I ask your help, but with this recent misfortune to the wheat harvest and in view of Mountbatten's representations, I believe that I am no longer justified in not asking for your aid. Wavell is doing his utmost in India by special measures. I would let you know immediately if he should find that he is able to revise his estimates of his requirements. 845.48/368 Memorandum by the Secretary of State to President Roosevelt WASHINGTON, May 31, 1944. I refer to the memorandum of April 30, 1944 65 from the White House transmitting a paraphrased copy of message no. 665 from the British Prime Minister, in which there is set forth the urgent need for additional shipping if the probability of a recurrence of famine conditions in India is to be averted. 62 Field Marshal Archibald P. Wavell, Viscount Wavell, Viceroy of India since October 1943. 63 Adm. Lord Louis Mountbatten, Supreme Allied Commander, South-East Asia Command. 04 4 Lt. Gen. Joseph W. Stilwell, Commander, U.S. Forces in the China-BurmaIndia Theater. 65 See footnote 60, p. 271. |