Uncle Sucker?

Congress will shortly be asked for more Lend-Lease money. But last week complaints from U.S. businessmen about Britain's use of Lend-Lease to date were reaching the noisy stage. Some reports seemed to make Uncle Shylock look like Uncle Sucker. Lend-Leasers and other friends of Britain were anxious to nail the complaints down, get the reasons for them. They found:

To the South. Loudest complaints concerned Latin America. For months, tales of U.S. Lend-Lease products (or reasonable facsimiles) turning up south of the border at cut prices have appeared, been denied or explained, reappeared. General Electric made a bid on electrical equipment, could promise no better than 15 months delivery (owing to defense and aid-to-Britain orders), was underbid by the British, who promised immediate delivery. Whether the promise can be kept is another matter.

In a similar case, the British (Metropolitan-Vickers) underbid G.E. on a $10,500,000 electrification program for the Brazilian Central railway, which carries manganese for the U.S. Vickers could not fulfill its contract but it kept G.E. out so long that the road will probably get no new equipment for the duration. That means the U.S. must ship it coal instead.

British exports to Argentina have increased some 17% since Lend-Lease was passed, though a 10% seasonal drop had been expected. Next to textiles and chemicals, the biggest shipments were machinery ($1,920,000 for the first six months of 1941), tinplate ($1,530,000), iron and steel products ($1,080,000), copper and bronze products, mostly wire ($750,000). These items are all competitive with U.S. products, and the U.S. is short of them. In some cases the British are able to supply better metals than U.S. manufacturers pressed by priorities. Shell Oil, for example, has instructed its South American branches to buy British valves and castings for that reason.

From Mexico and Argentina come reports that Latin American shipping companies, in the midst of a world shipping shortage, are unable to get navicerts unless they insure their cargoes with British companies. Four months ago all Argentina insurance companies were advised by London to reinsure only with Britain; whoever refused turned up promptly on the British blacklist. Grounds for this tough policy: it is the quickest means for Britain to be sure no cargoes slip through to the enemy. But it has on occasions been applied even against shipping which plies only Hemisphere ports.

To the North. The U.S. has bought war materials from Canada and then given them away under Lend-Lease. Lend-Lease has ordered Canadian trainer planes at prices 30% above their U.S. level, though 0PM has vetoed such orders. But the Canadian-U.S.-British trade situation as a whole is more complex than scandalous. Canada, up to her ears in her own aid-to-Britain program, is also a Lend-Lease go-between. Under the Hyde Park Agreement, the U.S. agreed to support Canadian exchange and to articulate the defense sectors of the two economies.

Few weeks ago, Washington was awash with tales of excess Canadian planes, gun parts and finished weapons that Britain did not want. Some aid-to-China enthusiasts went on a tour of Canada to see what they could find, were almost swept off their feet by offers of equipment, including 80 Hurricanes a month.

The Hurricanes were the product of the Canadian Car & Foundry plant at Fort William, Ontario, which used to send them to Britain. But since the Sabre-engined Typhoon and improved Spitfire came along, Hurricanes are obsolete by Battle of Britain standards. After discussion with OPM, et al., the Fort William plant agreed to continue making Hurricanes for Lend-Lease, since they are anything but obsolete in the Far East.

Anti-tank guns and other Canadian-made arms are also going into the Lend-Lease pool. Lend-Lease and Treasury last week were seeking some less ambiguous method of aiding Canadian exchange. But most U.S. purchases in Canada are of raw materials and parts, which are processed in the U.S. before going free to Britain. They are cogs in a continental arms factory of which the U.S. is banker.

At Home. Last week OPM Statistician Stacy May (see p. 61) flew to London. One of his quests: better statistics on Britain's use and need of her Lend-Lease imports. The British, out of fumbling politeness, have sometimes ordered things (such as cotton) they do not really need, and have timed their other orders very badly. Last month Sir Kenneth Lee of Britain's Industrial & Export Council arrived in the U.S. One of his jobs: to investigate and answer complaints of sharp British trade practices that hurt the U.S.

Typical problems for Sir Kenneth: The June issue of the British Export Gazette contained an advertisement offering all kinds of electric equipment plus copper and aluminum for immediate delivery anywhere. Chicago's Zenith Radio Corp. recently had a cable from Britain offering alnico, an alloy of aluminum, nickel, copper and iron unavailable in the U.S. because of priorities, essential to Zenith's battery sets. In both cases deliveries were stopped by British export control.

Some of these instances, rightly complained of by U.S. businessmen, are symptoms of Britain's real need for foreign exchange (especially in Latin America). Some represent the gap that still lies between two peacetime competitors. The rest are symptoms of the fantastic difficulty of policing every foreign-trade transaction in the midst of a war on three continents.

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