In 1945 Britain borrowed $4.34bn from the US consisting of a
$3.75bn line of credit and a "lend-lease" loan facility of $586m. The following
year the government agreed a $1.185bn line of credit loan from Canada. The money
was primarily designed to assist in the post-war reconstruction of Britain's
exhausted economy and shattered infrastructure. But the lend-lease loan related
to wartime supplies already in transit from the US under President Franklin D
Roosevelt's programme of the same name which began in 1941 and which ended
abruptly shortly after VJ Day in 1945. Roosevelt famously said the scheme was
like lending a neighbour a hosepipe to put out a fire. It marked a significant
step away from America's post-first world war isolationism.
The final payments today to the United States and Canada, are $83.25m and $22.7m respectively. Part of me thinks these loans should have been reassigned to Germany as soon as the Witschaftswunder was underway...
So England has finally paid off its WW2 debts, i wouldnt have it any other way.
ReplyDeleteBut when will England stop paying THIS "Debt?"
http://tinyurl.com/t4sw7
You might be interested to know that we have not yet paid for the First World War or indeed the Napoleonic war. See:
ReplyDeletehttp://aconservatives.blogspot.com/2006/12/world-war-ii-debt-repaid.html
"these loans should have been reassigned to Germany as soon as the Wirtschaftswunder was underway..."
ReplyDeleteBut Iain, that wouldn't have been physically possible: according to their Independence protocoll (which we signed), West Germany inherited in behalf of 'the German people' the entire war debt of the Deutsche Reich as of the 1939 borders, including that of the East (who were via the Volksrepublik paying vast amounts themselves to the Soviet Union and Comecon).
Add on the considerable W. German post-war annual payments to Poland, Israel etc, it's a miracle the Germans managed to survive at all. That they prospered as well as they did was because a) the Americans decided not to let them go to the wall, b) the Germans are quite positive about 'building up' and they all worked (many in Britain didn't and don't! My neighbour hasn't bothered for years, and he has two new cars and two large council flats in different London boroughs.)
Then came the East German burden, taken on by the taxpaying citizens of West Germany.
If they'd paid our National Debt, we'd have become even lazier as a nation than we are now.
This payment will go a long way to reduce US public debt - from $8.5 trillion to $8.499917 trillion (if my decimals are right)
ReplyDeleteNice to know we're assisting the septic economy so nobly at their time of need.
My father (WW2 Fleet Air Arm and brother RN drowned at sea 1939) hates the Americans because he says that they lent money to us, but paid for Germany's and Japan's post war economic recovery with gifts. Is there any truth in this?
ReplyDeleteMy father (WW2 Fleet Air Arm and brother RN drowned at sea 1939) hates the Americans because he says that they lent money to us, but paid for Germany's and Japan's post war economic recovery with gifts. Is there any truth in this?
ReplyDeleteI am not sure how these calculations work. I am sure I remember reading, not so long ago, that we had just finished paying for the Boer War. I suppose we must distinguish the specific cost of repaying these US post-war loans with our total borrowings for WWII. It would be nice to think that someone in the Treasury has all the figures.
ReplyDeleteAs to WWI, George V believed that if we could keep the cost down to £5m per day we could carry on indefinitely. Assuming we wanted to.
Our wonderful friends, the Yanks! Free board and lodging during WW2. Don't forget that they only entered the war after Pearl Harbour. Before that they were on a nice little earner from GB. Then came the end of the war and guess what..the Marshall Plan! This plan, financed by our "special friends" involved shelling out billions of dollars to rebuild Germany, Austria and anything else that stayed west of communist Europe. Payback? No, of course not, that was only for "special friends". Every British PM since WW2 has spoken of this special relationship. Get real, it doesn't exist!
ReplyDeleteGood old hate beats the facts, doesn't it?
ReplyDeleteMuch of the Lease Lend stuff was written off. The loans were at very low rates of interest (2% or so). Britain got vastly more Marshall Plan aid than the Germans or the French.
The problem was that the post war government spent the money as income, rather than as capital investment. By 1950 it was all gone...
The Germans lent the money to business to re-build and modernise. So, the money circulated round and round the German economy. So the Germans paid reparations *and* rebuilt their economy
The reason that the loans were kept gong is the same reason as long term mortages - inflation eats the princple. Imagine if you had bought a house in 1970 for £5000....