Paying off Lend Lease

[REVS]

Need help here, following one of those debates which began over the third bottle of wine, and I wasn't sure of my ground at all.

My good mate, British loyalist to the core, resident here 40 years, Aussie citizen as well, says his old mother country, Great Britain, was the only mob to fully pay off its WWII Lend Lease debts. He says all other countries either defaulted on their Lend Lease payments or asked the USA to waive their repayments, including my lot, Australia, who had their repayments waived upon request.

My mate's thesis is that by insisting on paying off its debts, England/Britain managed to impoverish itself during the whole of the 1950s, while all the other countries, including vanquished Japan and Germany, got on with the business of rebuilding from scratch.

I've never looked into the matter of post-war debt repayment, but now I'm interested. Anyone care to enlighten me on this one? Was Britain the only one to repay its debts in full? Did the Aussies ask for the bill to be waived?

[Lars]

You'll have to check on the other countries repaying, but your friend is wrong about the loans impoverishing the UK.

http://news.bbc.co.uk/2/hi/uk_news/magazine/4757181.stm

[Andreas]

I think the Soviets also paid up fully.

All the best

Andreas

[Stalins Organ]

Dunno that they paid up "fully" - didn't they come to an "arrangement" by which they paid some as "full and final settlement"?

[REVS]

Sorry to answer my own question, but I started this thread about five minutes before hitting the sack last night, hoping that overnight the good chaps here might be able to enlighten me. And thanks for your replies. It now being morning here, I did some Googling and this is what I have found so far.

Here's a link to a Google answers thing which includes lots of its own links.

http://answers.google.com/answers/threadview?id=372591

And here's a link to the Australian Govt's agreement with the US, signed in June 46

http://www.info.dfat.gov.au/info/historical/HistDocs.nsf/(LookupVolNoNumber)/9~294

And so it sums up like this:

Brits - loaned $31 billion through war, repaid $5.2 billion, final payment made late 2005. Annual repayments around $188 million, deferred on six occasions due to hardship. The original program was to pay off the $5.2 billion over 50 years, with an interest rate of 2%. With the deferrals, it took 56 years.

Russians – loaned $11 billion, the US asked them to repay $1.3 billion, the Russians offered $170 million! Then in 1972 the Russians agreed to buy $750 million in US grain as a final settlement. They did well out of that one, didn't they? Didn't help them in the end though.

Aussies – unable to find out how much was loaned, but the idea of 'Reverse Lend-Lease' was used as a theoretical offsetting charge to the US for the use of our bases, ports and other facilities during the war (apparently saving our arses was tossed in as a complimentary bonus item by the US). In June 46 the USA waived any further payments, closing off the books, on the basis of Reverse Lend Lease and continued US access to Australian ports and bases, etc.

[Affentitten]

Well in the Australian case you also have longer term pay backs like us buying US aircraft, US ships etc.

[Affentitten]

Sorry, but on my quick bit of research it seems that there was NO repayment of Lend Lease expected or given if we are talking about supplies etc sent during the war. It was only those shipments that were sent AFTER or in transit at the War's end that were to be repaid, and these were 'sold' at a value of about 10c in the dollar. That's what Britain has been repaying and the USSR too. Given the trifling amounts involved with Australia and so on, it's no surprise that it was waived.

So yes, Britain did fully repay it's Lend Lease debts, but there were not technically wartime debts. It did not fully pay of its WW2 assistance from the USA, which was worth many billions of pounds more....but then, they were never expected to.

[REVS]

That's an interesting point, about the paid-off debts being post-war. Thanks for that.

[Stalins Organ]

Aff I think you are wrong there - stuff that was left in the UK was sold at 10c in the $ rathe than being returned or scrapped, but that was added to the wartime debt for stuff that could not be returned.

the whole was then made into a 60 yr loan at 2% which the Brits finished repaying in 2006.

the graph below shows the value of NZ LL - little enough, but it illustrates tht it wasn't all 1-way.

The official LL "story" for NZ is here

[Affentitten]

This is where I am getting it from:

wiki/Lend_lease

Lend-Lease (Public Law 77-11)[1] was the name of the program under which the United States of America supplied the United Kingdom, the Soviet Union, China, France and other Allied nations with vast amounts of war material between 1941 and 1945 in return for, in the case of Britain, military bases in Newfoundland, Bermuda, and the British West Indies.

(so not in return for $$$)

................

A total of $50.1 billion (equivalent to nearly $700 billion at 2007 prices) worth of supplies were shipped: $31.4 billion to Britain, $11.3 billion to the Soviet Union, $3.2 billion to France and $1.6 billion to China. Reverse Lend Lease comprised services (like rent on air bases) that went to the U.S. It totaled $7.8 billion, of which $6.8 billion came from the British and the Commonwealth. Apart from that, there were no repayments of supplies that arrived before the termination date, the terms of the agreement providing for their return or destruction. (Supplies after that date were sold to Britain at a discount, for £1,075 million, using long-term loans from the U.S.)

or from Citizendium

Citizendium Lend Lease

Lend-Lease was the system by which the U.S. gave its allies $50 billion in military aid in 1941-45 to help win World War II.[1]. There was no repayment required. $31 billion went to Britain, $11 billion to the Soviet Union, $3 billion to France, and $1.6 billion to China.

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So in other words, the wartime amounts were partially repaid by putting a value on the lease of airbases, feeding the troops etc etc. There was no debt arrangement for this supply in terms of a balance sheet to be repaid. The Brtis paid off some gear that was still flowing in after September 1945, when the plan officially ended. But they certainly weren't paying off Shermans and oil barrels shipped during the war.

[JonS]

AIUI, the stuff that was shipped during the war was either supposed to be returned at some future date, or paid for if it got broken in the meantime (as military equipment is wont to do).

Hence "Lend-Lease", and Roosevelt's(?) "lend your neighbor a bucket when his house is burning, and sort out the payment later" analogy.

[Affentitten]

But in effect, neither of these things happened, mainly due to the gigantic surpluses America had bullt up anyway. No point in returning Liberty Ships that would just be scrapped anyway.

The whole reverse Lend Lease thing seems a bit of a face saver too. "Oh, so you want to send the US Army Air Force over here to carry out strategic bombing against Germany? Well, we'll be charging you a commercial rent on those air fields. And all those landing craft you've got tied up to invade Normandy? Here's your bill for mooring fees."

[SSgt Viljuri]

We should not forget Marshall aid either, and funnily enough, there's a country that paid it back too...

That nameless country received substantial amounts of financial aid, contrary what Wikipedia article states above, from the US sources, just that it was in a form of loans and guarantees.

[Sgt Joch]

Russians – loaned $11 billion, the US asked them to repay $1.3 billion, the Russians offered $170 million! Then in 1972 the Russians agreed to buy $750 million in US grain as a final settlement. They did well out of that one, didn't they? Didn't help them in the end though.

It depends how you measure return on your investment, by supplying food and armament to Britain and the USSR, the USA kept those countries in the war fighting Germany which lowered american casualties in the long run.

The USSR lost 10,700,000 military dead in ww2, while the US lost 416,800, so you could say it was actually a very good investment for the US.