All strongly of the opinion I should return home as rapidly as possible in order to put whole position as seen from here before you. Earnestly hope you will agree to this. Propose to leave tomorrow morning. Perfectly prepared to fly back here if required after I have seen you, but am convinced that this meeting between us is most urgent. It is impossible to explain position and plans fully by telegram.Please reply urgently.

a.s.sent was given, and the Secretary of State began his journey. The following points were made in his simultaneous telegrams to me: Conference [in Cairo] discussed situation in Crete. Admiral Cunningham emphasised the value of possession of Crete to us as a means of securing Eastern Mediterranean and of interfering with Italian transit traffic to North Africa. It would not, however, be possible to base fleet on Suda Bay for more than a few hours at a time at present owing to lack of anti-submarine protection.He does not consider Italian attempt to take Crete is to be antic.i.p.ated in the near future, nor unless and until Greece is overrun. He and Wavell have concerted arrangements for sending at once to Crete a part of the reinforcements referred to in my telegram of November 1. Admiral Cunningham does not consider it is necessary to keep any large British military garrison in Crete, and is convinced that once the Cretans are organised, one battalion, together with anti-aircraft defences, would suffice. We then discussed the general question of help to Greece. As we said on September 22, "any a.s.sistance we may be able to give to Greece cannot be given until German-Italian threat to Egypt is finally liquidated, the security of Egypt being vital to our strategy and incidentally to the future of Greece." ...Chief cry for help is for air reinforcements. Number 30 Blenheim Squadron left today for Athens. Longmore again emphasised his extreme reluctance to add any more squadrons to the Greek commitment in present conditions. He feels that to do so would lead to a large wastage of his aircraft from Italian attack whilst the aircraft are on Greek or Cretan aerodromes unprepared with protecting pens, adequate ground anti-aircraft defence, and other precautions of such nature, which are difficult to improvise at short notice....In general all Commanders-in-Chief were strongly of the opinion that the defence of Egypt is of paramount importance to our whole position in the Middle East. They consider that from the strategical point of view the security of Egypt is the most urgent commitment, and must take precedence of attempts to prevent Greece being overrun. It is also essential if we are to retain the support of Turkey....

He added in my private cipher the following: 5.XI.40.Although reinforcements ordered in Chiefs of Staffs' telegrams involve additional risks in Western Desert and probably increased casualties, these risks must be faced in view of political commitments to aid Greece. Withdrawal, though it will hamper arrangements made in Western Desert, will not entirely dislocate them. But any increase in commitment or attempt to hasten rate of despatch to Greece beyond that now laid down will mean serious risk to our position in Egypt. Uncertain factor still remains date by which air reinforcements, particularly fighters, arrive in Egypt to replace those sent to Greece. Experience hitherto shows that previous forecasts have not been fulfilled and time-table is sadly behind. Now feel that there is nothing further I can do here, and propose leave tomorrow morning by air.

The Secretary of State for War got back home on November 8, and came that evening after the usual raid had begun to see me in my temporary underground abode in Piccadilly. He brought with him the carefully guarded secret which I wished I had known earlier. Nevertheless, no harm had been done. Mr. Eden unfolded in considerable detail to a select circle, including the C.I.G.S. and General Ismay, the offensive plan which General Wavell and General Wilson had conceived and prepared. No longer were we to await in our fortified lines at Mersa Matruh an Italian a.s.sault, for which defensive battle such long and artful preparations had been made. On the contrary, within a month or so we were ourselves to attack. The operation was to be called "Compa.s.s."

As will be seen from the map, Marshal Graziani's Italian army, then above eighty thousand strong, which had crossed the Egyptian frontier, was spread over a fifty-mile front in a series of fortified camps, which were separated by wide distances and not mutually supporting, and with no depth in the system. Between the enemy's right flank at Sofafi and his next camp at Nibeiwa there was a gap of over twenty miles. The plan was to make an offensive spring through this gap, and, turning towards the sea, attack Nibeiwa camp and the Tummar group of camps in succession from the west that is to say, from the rear. Meanwhile, both the Sofafi camps and the camp at Meiktila, on the coast, were to be contained by light forces. For this purpose there were to be employed the 7th Armoured Division, the 4th Indian Division, now complete, and the 16th British Infantry Brigade, together with a composite force from the garrison of Mersa Matruh. This plan involved a serious risk, but also offered a glittering prize. The risk lay in the launching of all our best troops into the heart of the enemy's position by a move of seventy miles on two successive nights over the open desert, and with the peril of being observed and attacked from the air during the intervening day. Besides this, the food and petrol had to be nicely calculated, and if the time-scale went wrong the consequences must be grave.

The prize was worthy of the hazard. The arrival of our vanguard on the sea at Buq Buq or thereabouts would cut the communications of three-quarters of Marshal Graziani's army. Attacked by surprise from the rear, they might well be forced as a result of vigorous fighting into ma.s.s surrenders. In this case the Italian front would be irretrievably broken. With all their best troops captured or destroyed, no force would be left capable of withstanding a further onslaught, nor could any organised retreat be made to Tripoli along the hundreds of miles of coastal road.

Here, then, was the deadly secret which the Generals had talked over with their Secretary of State for War. This was what they had not wished to telegraph. We were all delighted. I purred like six cats. Here was something worth doing. It was decided there and then, subject to the agreement of the Chiefs of Staff and the War Cabinet, to give immediate sanction and all possible support to this splendid enterprise, and that it should take first place in all our thoughts and have, amid so many other competing needs, first claim upon our strained resources.

In due course these proposals were brought before the War Cabinet. I was ready to state the case or have it stated. But when my colleagues learned that the Generals on the spot and the Chiefs of Staff were in full agreement with me and Mr. Eden, they declared that they did not wish to know the details of the plan, that the fewer who knew them the better, and that they whole-heartedly approved the general policy of the offensive. This was the att.i.tude which the War Cabinet adopted on several important occasions, and I record it here that it may be a model, should similar dangers and difficulties arise in future times.

The Italian Fleet had not reacted in any way against our occupation of Crete, but Admiral Cunningham had for some time been anxious to strike a blow at them with his now augmented naval air forces as they lay in their main base at Taranto. The attack was delivered on November 11 as the climax of a well-concerted series of operations, during which Malta received troops, and further naval reinforcements, including the battleship Barham, Barham, two cruisers, and three destroyers, reached Alexandria. Taranto lies in the heel of Italy three hundred and twenty miles from Malta. Its magnificent harbour was heavily defended against all modern forms of attack. The arrival at Malta of some fast reconnaissance machines enabled us to discern our prey. The British plan was to fly two waves of aircraft from the two cruisers, and three destroyers, reached Alexandria. Taranto lies in the heel of Italy three hundred and twenty miles from Malta. Its magnificent harbour was heavily defended against all modern forms of attack. The arrival at Malta of some fast reconnaissance machines enabled us to discern our prey. The British plan was to fly two waves of aircraft from the Ill.u.s.trious, Ill.u.s.trious, the first of twelve and the second of nine, of which eleven were to carry torpedoes, and the rest either bombs or flares. The the first of twelve and the second of nine, of which eleven were to carry torpedoes, and the rest either bombs or flares. The Ill.u.s.trious Ill.u.s.trious released her aircraft shortly after dark from a point about a hundred and seventy miles from Taranto. For an hour the battle raged amid fire and destruction among the Italian ships. Despite the heavy flak, only two of our aircraft were shot down. The rest flew safely back to the released her aircraft shortly after dark from a point about a hundred and seventy miles from Taranto. For an hour the battle raged amid fire and destruction among the Italian ships. Despite the heavy flak, only two of our aircraft were shot down. The rest flew safely back to the Ill.u.s.trious. Ill.u.s.trious.

By this single stroke the balance of naval power in the Mediterranean was decisively altered. The air photographs showed that three battleships, one of them the new Littorio, Littorio, had been torpedoed, and in addition one cruiser was reported hit and much damage inflicted on the dockyard. Half the Italian battle fleet was disabled for at least six months, and the Fleet Air Arm could rejoice at having seized by their gallant exploit one of the rare opportunities presented to them. had been torpedoed, and in addition one cruiser was reported hit and much damage inflicted on the dockyard. Half the Italian battle fleet was disabled for at least six months, and the Fleet Air Arm could rejoice at having seized by their gallant exploit one of the rare opportunities presented to them.

An ironic touch is imparted to this event by the fact that on this very day the Italian Air Force at the express wish of Mussolini had taken part in the air attack on Great Britain. An Italian bomber force, escorted by about sixty fighters attempted to bomb Allied convoys in the Medway. They were intercepted by our fighters, eight bombers and five fighters being shot down. This was their first and last intervention in our domestic affairs. They might have found better employment defending their fleet at Taranto.

I kept the President well informed:

Former Naval Person to President Roosevelt.

16.X1.40.

I am sure you will have been pleased about Taranto. The three uninjured Italian battleships have quitted Taranto today, which perhaps means they are withdrawing to Trieste.

And again:

Former Naval Person to President Roosevelt.

21.XI.40.

You may be interested to receive the following naval notes on the action at Taranto which I have asked the Admiralty to prepare:1. This attack had been in Commander-in-Chief Mediterranean's mind for some time; he had intended to carry it out on October 21 (Trafalgar Day), when the moon was suitable, but a slight mishap to Ill.u.s.trious Ill.u.s.trious led to a postponement. During his cruise in the Central Mediterranean on October 31 and November 1, it was again considered, but the moon did not serve and it was thought an attack with parachute flares would be less effective. Success in such an attack was believed to depend on state of moon, weather, an undetected approach by the Fleet, and good reconnaissance. The latter was provided by flying-boats and a Glenn Martin squadron working from Malta. On the night of November 11/12, all the above conditions were met. Unfavourable weather in the Gulf of Taranto prevented a repet.i.tion on 12th/13th. led to a postponement. During his cruise in the Central Mediterranean on October 31 and November 1, it was again considered, but the moon did not serve and it was thought an attack with parachute flares would be less effective. Success in such an attack was believed to depend on state of moon, weather, an undetected approach by the Fleet, and good reconnaissance. The latter was provided by flying-boats and a Glenn Martin squadron working from Malta. On the night of November 11/12, all the above conditions were met. Unfavourable weather in the Gulf of Taranto prevented a repet.i.tion on 12th/13th.2. Duplex pistols were used, and probably contributed to the success of the torpedo attack.3. The Greek Amba.s.sador at Angora reported on November 11 that Italian Fleet was concentrating at Taranto in preparation for an attack on Corfu. Reconnaissance on November 13 shows that undamaged battleships and eight-inch-gun cruisers have left Taranto presumably owing to the attack on 11th/12th.

I now addressed General Wavell.

Prime Minister to General Wavell.

14.XI.40.

Chiefs of Staff, Service Ministers, and I have examined general situation in the light of recent events. Italian check on Greek front; British naval success against battle fleet at Taranto; poor showing Italian airmen have made over here; encouraging reports received of low morale in Italy; Gallabat; your own experiences by contacts in Western Desert; above all, the general political situation, make it very desirable to undertake operation of which you spoke to Secretary of State for War.It is unlikely that Germany will leave her flagging ally unsupported indefinitely. Consequently, it seems that now is the time to take risks and strike the Italians by land, sea, and air. You should act accordingly in concert with other Commanders-in-Chief.

Prime Minister to General Wavell.

26.XI.40.

News from every quarter must have impressed on you the importance of Compa.s.s in relation to whole Middle East position, including Balkans and Turkey, to French att.i.tude in North Africa, to Spanish att.i.tude, now trembling on the brink, to Italy, in grievous straits, and generally to the whole war. Without being over-sanguine, I cannot repress strong feelings of confidence and hope, and feel convinced risks inseparable from great deeds are fully justified.2. Have asked Admiralty to inquire about part a.s.signed to Fleet. If success is achieved, presume you have plans for exploiting it to the full. I am having a Staff study made of possibilities open to us, if all goes well, for moving fighting troops and also reserve forward by sea in long hops along the coast, and setting-up new supply bases to which pursuing armoured vehicles and units might resort. Without wishing to be informed on details, I should like to be a.s.sured that all this has been weighed, explored, and as far as possible prepared.It seems difficult to believe that Hitler will not be forced to come to the rescue of his partner, and obviously German plans may be far advanced for a drive through Bulgaria at Salonika. From several quarters we have reports in that Germans do not approve of Mussolini's adventure, and that they are inclined to let him pay the price himself. This makes me all the more suspicious that something bad is banking up ready to be let off soon. Every day's delay is in our favour. It might be that Compa.s.s would in itself determine action of Yugoslavia and Turkey, and anyhow, in event of success, we should be able to give Turkey far greater a.s.surances of early support than it has been in our power to do so far. One may indeed see possibility of centre of gravity in Middle East shifting suddenly from Egypt to the Balkans, and from Cairo to Constantinople. You are no doubt preparing your mind for this, and a Staff study is being made here.As we told you the other day, we shall stand by you and Wilson in any well-conceived action irrespective of result, because no one can guarantee success in war, but only deserve it.Tell Longmore that I much admire his calling-in of the southern squadrons and accepting the risk of punishment there. If all is well Furious Furious and her outfit should reach Takoradi tomorrow. This should make amends for all the feathers we have had to pull out of him for Greece, where the part played by R.A.F. in Greek victories has been of immense military and political consequence. All good wishes to you both, and to the Admiral, who is doing so splendidly. I rejoice that he should feel Suda Bay "an inestimable benefit." and her outfit should reach Takoradi tomorrow. This should make amends for all the feathers we have had to pull out of him for Greece, where the part played by R.A.F. in Greek victories has been of immense military and political consequence. All good wishes to you both, and to the Admiral, who is doing so splendidly. I rejoice that he should feel Suda Bay "an inestimable benefit."

Prime Minister to Foreign Secretary.

26.XI.40.

I suggest the following to our Amba.s.sador in Turkey:We have placed before you the various arguments for and against Turkish intervention which have occurred to the Staff officers who have reported upon the matter, but we do not wish to leave you in any doubt of what our own opinion and your instructions are. We want Turkey to come into the war as soon as possible. We are not pressing her to take any special steps to help the Greeks, except to make it clear to Bulgaria that any move by Germany through Bulgaria to attack Greece, or any hostile movement by Bulgaria against Greece, will be followed by immediate Turkish declaration of war. We should like Turkey and Yugoslavia now to consult together so as, if possible, to have a joint warning ready to offer Bulgaria and Germany at the first sign of a German movement towards Bulgaria. In the event of German troops traversing Bulgaria with or without Bulgarian a.s.sistance, it is vital that Turkey should fight there and then. If she does not, she will find herself left absolutely alone, the Balkans will have been eaten up one by one, and it will be beyond our power to help her. You may mention that by the summer of 1941 we hope to have at least fifteen divisions operating in the Middle East, and by the end of the year nearly twenty-five. We do not doubt our ability to defeat Italy in Africa.6 P.M P.M. The Chiefs of Staffs are in general agreement with the above.

Prime Minister to First Lord, First Sea Lord, and General Ismay, for C.O.S. Committee. C.A.S. to see.

30.XI.40.

Furious should return home at once, and carry another load of aircraft and pilots as reinforcement for the Middle East. Every effort should be made to put off her refit till after she has carried this force. C.A.S. should say what composition of force is best. should return home at once, and carry another load of aircraft and pilots as reinforcement for the Middle East. Every effort should be made to put off her refit till after she has carried this force. C.A.S. should say what composition of force is best.

Prime Minister to General Ismay.

1.XII.40.

Exactly what have we got and done at Suda Bay [Crete] i.e., troops, A.A. guns, coast defence guns, lights, wireless, R.D.F., nets, mines, preparation of aerodromes, etc.?I hope to be a.s.sured that many hundreds of Cretans are working at strengthening the defences and lengthening and improving the aerodromes.

General Ismay, for C.O.S. Committee.

1.XII.40.

The continued retreat of the Italians in Albania, and the reports which we have received today of difficulties of feeding and watering their forces in the Libyan Desert, together with other reports of aircraft being moved back to Tripoli to be safer from our attacks, combined with safe arrival at Takoradi of thirty-three Hurricanes with first-cla.s.s pilots, all const.i.tute new facts ent.i.tling us to take a more confident view of the situation, which should be communicated to General Wavell.The enormous advantage of being able, once an enemy is on the run, to pull supplies and fighting troops forward eighty miles in a night by sea, and bring fresh troops up to the advance guard, is very rarely offered in war. General Wavell's reply to my telegram does not seem to take any account of this, and, considering how much we have ourselves at stake, I do not think we should be doing our duty if we did not furnish him with the results of our Staff study. It is a crime to have amphibious power and leave it unused. Therefore, I wish the study, if favourable, to be telegraphed. It must, however, be ready by the 3d at latest.I add the following general observation: The fact that we now have established ourselves at Suda Bay ent.i.tles us to feel much easier about Malta. While the Fleet is or may be at Suda, it will be most unlikely that any large landing will be attempted at Malta, which we have already reinforced by tanks and guns from Middle East.... The possession of Suda Bay has made an enormous change in the Eastern Mediterranean.

The story of Suda Bay is sad. The tragedy was not reached until 1941. I believe I had as much direct control over the conduct of the war as any public man had in any country at this time. The knowledge I possessed, the fidelity and active aid of the War Cabinet, the loyalty of all my colleagues, the ever-growing efficiency of our war machine, all enabled an intense focusing of const.i.tutional authority to be achieved. Yet how far short was the action taken by the Middle East Command of what was ordered and what we all desired! In order to appreciate the limitations of human action, it must be remembered how much was going on in every direction at the same time. Nevertheless, it remains astonishing to me that we should have failed to make Suda Bay the amphibious citadel of which all Crete was the fortress. Everything was understood and agreed, and much was done; but all was half-scale effort. We were presently to pay heavily for our shortcomings.

The Italian invasion of Greece from Albania was another heavy rebuff to Mussolini. The first a.s.sault was repulsed with heavy loss, and the Greeks immediately counter-attacked. In the northern (Macedonian) sector the Greeks advanced into Albania, capturing Koritza on November 22. In the central sector of the northern Pindus an Italian Alpini division was annihilated. In the coastal zone, where the Italians had at first succeeded in making deep penetrations, they hastily retreated from the Kalamas River. The Greek army, under General Papagos, showed superior skill in mountain warfare, out-manoeuvring and outflanking their enemy. By the end of the year their prowess had forced the Italians thirty miles behind the Albanian frontier along the whole front. For several months twenty-seven Italian divisions were pinned in Albania by sixteen Greek divisions. The remarkable Greek resistance did much to hearten the other Balkan countries and Mussolini's prestige sank low.

On November 9, Mr. Neville Chamberlain died at his country home in Hampshire. I had obtained the King's permission to have him supplied with the Cabinet papers, and until a few days before the end he followed our affairs with keenness, interest, and tenacity. He met the approach of death with a steady eye. I think he died with the comfort of knowing that his country had at least turned the corner.

As soon as the House met on November 12, I paid a tribute to his character and career: At the lychgate we may all pa.s.s our own conduct and our own judgments under a searching review. It is not given to human beings, happily for them, for otherwise life would be intolerable, to foresee or to predict to any large extent the unfolding course of events. In one phase men seem to have been right, in another they seem to have been wrong. Then again, a few years later, when the perspective of time has lengthened, all stands in a different setting. There is a new proportion. There is another scale of values. History with its flickering lamp stumbles along the trail of the past, trying to reconstruct its scenes, to revive its echoes, and kindle with pale gleams the pa.s.sion of former days. What is the worth of all this? The only guide to a man is his conscience; the only shield to his memory is the rect.i.tude and sincerity of his actions. It is very imprudent to walk through life without this shield, because we are so often mocked by the failure of our hopes and the upsetting of our calculations; but with this shield, however the Fates may play, we march always in the ranks of honour.Whatever else history may or may not say about these terrible, tremendous years, we can be sure that Neville Chamberlain acted with perfect sincerity according to his lights and strove to the utmost of his capacity and authority, which were powerful, to save the world from the awful, devastating struggle in which we are now engaged.... Herr Hitler protests with frantic words and gestures that he has only desired peace. What do these ravings and outpourings count before the silence of Neville Chamberlain's tomb? Long, hard, and hazardous years lie before us, but at least we enter upon them united and with clean hearts....He was, like his father and his brother Austen before him, a famous Member of the House of Commons, and we here a.s.sembled this morning, members of all parties, without a single exception, feel that we do ourselves and our country honour in saluting the memory of one whom Disraeli would have called "an English worthy."

13.

Lend-Lease

Roosevelt Re-elected President - British Munitions Contracts in the United States - Lord Lothian Visits Me at Ditchley - "Cash and Carry," November, 1939 - British Losses of Dollars in the Twilight War - A New Era, May, 1940 - I Draft My Letter of December 8, 1940, to the President - The Common Interests of Britain and the United States - Need of Forward Planning - British Recovery Since June - Impending Peril on the Atlantic in 1941 - Our Shipping Losses - British and German Battleship Strength - The Menace of j.a.pan - The Atlantic Lifeline - American Influence on Eire - My Request for Two Thousand Additional Aircraft a Month - Army Equipment - How to Pay the Bill? - Appeal to the United States - The President's Discovery: "Lend-Lease" - His Press Conference of December 17 - "Eliminate the Dollar Sign" - Lend-Lease Bill Presented to Congress - Sudden Death of Philip Lothian - I Choose Lord Halifax as His Successor - My Tribute to Lord Halifax - Mr. Eden Returns Home to the Foreign Office - Captain Margesson Secretary of State for War - Waiting for Lend-Lease - New Year Greetings to the President.

ABOVE THE ROAR AND CLASH OF ARMS there now loomed upon us a world-fateful event of a different order. The presidential election took place on November 6. In spite of the tenacity and vigour with which these four-yearly contests are conducted, and the bitter differences on domestic issues which at this time divided the two main parties, the Supreme Cause was respected by the responsible leaders, Republicans and Democrats alike. At Cleveland on November 2, Mr. Roosevelt said: "Our policy is to give all possible material aid to the nations which still resist aggression across the Atlantic and Pacific Oceans." His opponent, Mr. Wendell Willkie, declared next day at Madison Square Garden: "All of us Republicans, Democrats, and Independents believe in giving aid to the heroic British people. We must make available to them the products of our industry." there now loomed upon us a world-fateful event of a different order. The presidential election took place on November 6. In spite of the tenacity and vigour with which these four-yearly contests are conducted, and the bitter differences on domestic issues which at this time divided the two main parties, the Supreme Cause was respected by the responsible leaders, Republicans and Democrats alike. At Cleveland on November 2, Mr. Roosevelt said: "Our policy is to give all possible material aid to the nations which still resist aggression across the Atlantic and Pacific Oceans." His opponent, Mr. Wendell Willkie, declared next day at Madison Square Garden: "All of us Republicans, Democrats, and Independents believe in giving aid to the heroic British people. We must make available to them the products of our industry."

This larger patriotism guarded both the safety of the American Union and our life. Still, it was with profound anxiety that I awaited the result. No newcomer into power could possess or soon acquire the knowledge and experience of Franklin Roosevelt. None could equal his commanding gifts. My own relations with him had been most carefully fostered by me, and seemed already to have reached a degree of confidence and friendship which was a vital factor in all my thought. To close the slowly built-up comradeship, to break the continuity of all our discussions, to begin again with a new mind and personality, seemed to me a repellent prospect. Since Dunkirk, I had not been conscious of the same sense of strain. It was with indescribable relief that I received the news that President Roosevelt had been re-elected.

Former Naval Person to President Roosevelt.

6.XI.40.

I did not think it right for me as a foreigner to express any opinion upon American politics while the election was on, but now I feel you will not mind my saying that I prayed for your success and that I am truly thankful for it. This does not mean that I seek or wish for anything more than the full, fair, and free play of your mind upon the world issues now at stake in which our two nations have to discharge their respective duties. We are entering upon a sombre phase of what must evidently be a protracted and broadening war, and I look forward to being able to interchange my thoughts with you in all that confidence and good will which has grown up between us since I went to the Admiralty at the outbreak. Things are afoot which will be remembered as long as the English language is spoken in any quarter of the globe, and in expressing the comfort I feel that the people of the United States have once again cast these great burdens upon you I must avow my sure faith that the lights by which we steer will bring us all safely to anchor.

Curiously enough, I never received any answer to this telegram. It may well have been engulfed in the vast ma.s.s of congratulatory messages which were swept aside by urgent work.

Up till this time we had placed our orders for munitions in the United States separately from, though in consultation with, the American Army, Navy, and Air Services. The ever-increasing volume of our several needs had led to overlapping at numerous points, with possibilities of friction arising at lower levels in spite of general good will. "Only a single, unified Government procurement policy for all defence purposes," writes Mr. Stettinius,1 "could do the tremendous job that was now ahead." This meant that the United States Government should place all the orders for weapons in America. Three days after his re-election the President publicly announced a "rule of thumb" for the division of American arms output. As weapons came off the production line, they were to be divided roughly fifty-fifty between the United States forces and the British and Canadian forces. That same day the Priorities Board approved a British request to order twelve thousand more aeroplanes in the United States in addition to the eleven thousand we had already booked. But how was ail this to be paid for? "could do the tremendous job that was now ahead." This meant that the United States Government should place all the orders for weapons in America. Three days after his re-election the President publicly announced a "rule of thumb" for the division of American arms output. As weapons came off the production line, they were to be divided roughly fifty-fifty between the United States forces and the British and Canadian forces. That same day the Priorities Board approved a British request to order twelve thousand more aeroplanes in the United States in addition to the eleven thousand we had already booked. But how was ail this to be paid for?

In mid-November Lord Lothian flew home from Washington and spent two days with me at Ditchley. I had been advised not to make a habit of staying at Chequers every week-end, especially when the moon was full, in case the enemy should pay me special attention. Mr. Ronald Tree and his wife made me and my staff very welcome many times at their large and charming house near Oxford. Ditchley is only four or five miles away from Blenheim. In these agreeable surroundings I received the Amba.s.sador. Lothian seemed to me a changed man. In all the years I had known him, he had given me the impression of high intellectual and aristocratic detachment from vulgar affairs. Airy, viewy, aloof, dignified, censorious, yet in a light and gay manner, he had always been good company. Now, under the same hammer that beat upon us all, I found an earnest, deeply stirred man. He was primed with every aspect and detail of the American att.i.tude. He had won nothing but good will and confidence in Washington by his handling of the destroyer-c.u.m-bases negotiations. He was fresh from intimate contact with the President, with whom he had established a warm personal friendship. His mind was now set upon the dollar problem; this was grim indeed.

Before the war the United States was governed by the pre-war Neutrality Act, which obliged the President on September 3, 1939, to place an embargo on all shipments of arms to any of the belligerent nations. Ten days later, he had called Congress to a special session to consider the removal of this ban, which, under the appearance of impartiality, virtually deprived Great Britain and France of all the advantages of the command of the seas in the transport of munitions and supplies. It was not until the end of November, 1939, after many weeks of discussion and agitation, that the Neutrality Act was repealed and the new principle of "Cash and Carry" subst.i.tuted. This still preserved the appearance of strict neutrality on the part of the United States, for Americans were as free to sell weapons to Germany as to the Allies. In fact, however, our sea-power prevented any German traffic, while Britain and France could "carry" freely as long as they had "cash." Three days after the pa.s.sage of the new law, our Purchasing Commission, headed by Mr. Arthur Purvis, a man of outstanding ability, began its work.

Britain entered the war with about 4,500,000,000 in dollars, or in gold and in United States investments that could be turned into dollars. The only way in which these resources could be increased was by new gold-production in the British Empire, mainly of course in South Africa, and by vigorous efforts to export goods, princ.i.p.ally luxury goods, such as whisky, fine woollens, and pottery, to the United States. By these means an additional two thousand million dollars were procured during the first sixteen months of the war. During the period of the "Twilight War," we were torn between a vehement desire to order munitions in America and gnawing fear as our dollar resources dwindled. Always in Mr. Chamberlain's day the Chancellor of the Exchequer, Sir John Simon, would tell us of the lamentable state of our dollar resources and emphasise the need for conserving them. It was more or less accepted that we should have to reckon with a rigorous limitation of purchases from the United States. We acted, as Mr. Purvis once said to Stettinius, "as if we were on a desert island on short rations which we must stretch as far as we could." 2 2 This had meant elaborate arrangements for eking out our money. In peace, we imported freely and made payments as we liked. When war came, we had to create a machine which mobilised gold and dollars and other private a.s.sets, which stopped the ill-disposed from remitting their funds to countries where they felt things were safer, and which cut out wasteful imports and other expenditures. On top of making sure that we did not waste our money, we had to see that others went on taking it. The countries of the sterling area were with us: they adopted the same kind of exchange-control policy as we did and were willing takers and holders of sterling. With others we made special arrangements by which we paid them in sterling, which could be used anywhere in the sterling area, and they undertook to hold any sterling for which they had no immediate use and to keep dealings at the official rates of exchange. Such arrangements were originally made with the Argentine and Sweden, but were extended to a number of other countries on the Continent and in South America. These arrangements were completed after the spring of 1940, and it was a matter of satisfaction and a tribute to sterling that we were able to achieve and maintain them in circ.u.mstances of such difficulty. In this way we were able to go on dealing with most parts of the world in sterling, and to conserve most of our precious gold and dollars for our vital purchases in the United States.

When the war exploded into hideous reality in May, 1940, we were conscious that a new era had dawned in Anglo-American relations. From the time I formed the new Government and Sir Kingsley Wood became Chancellor of the Exchequer we followed a simpler plan, namely, to order everything we possibly could and leave future financial problems on the lap of the Eternal G.o.ds. Fighting for life and presently alone under ceaseless bombardment, with invasion glaring upon us, it would have been false economy and misdirected prudence to worry too much about what would happen when our dollars ran out. We were conscious of the tremendous changes taking place in American opinion, and of the growing belief, not only in Washington but throughout the Union, that their fate was bound up with ours. Moreover, at this time an intense wave of sympathy and admiration for Britain surged across the American nation. Very friendly signals were made to us from Washington direct, and also through Canada, encouraging our boldness and indicating that somehow or other a way would be found. In Mr. Morgenthau, Secretary of the Treasury, the cause of the Allies had a tireless champion. The taking-over of the French contracts in June had almost doubled our rate of spending across the Exchange. Besides this, we placed new orders for aeroplanes, tanks, and merchant ships in every direction, and promoted the building of great new factories both in the United States and Canada.

Up till November, 1940, we had paid for everything we had received. We had already sold $335,000,000 worth of American shares requisitioned for sterling from private owners in Britain. We had paid out over $4,500,000,000 in cash. We had only two thousand millions left, the greater part in investments, many of which were not readily marketable. It was plain that we could not go on any longer in this way. Even if we divested ourselves of all our gold and foreign a.s.sets, we could not pay for half we had ordered, and the extension of the war made it necessary for us to have ten times as much. We must keep something in hand to carry on our daily affairs.

Lothian was confident that the President and his advisers were earnestly seeking the best way to help us. Now that the election was over, the moment to act had come. Ceaseless discussions on behalf of the Treasury were proceeding in Washington between their representative, Sir Frederick Phillips, and Mr. Morgenthau. The Amba.s.sador urged me to write a full statement of our position to the President. Accordingly that Sunday at Ditchley I drew up, in consultation with him, a personal letter. On November 16, I telegraphed to Roosevelt, "I am writing you a very long letter on the outlook for 1941 which Lord Lothian will give you in a few days." As the doc.u.ment had to be checked and rechecked by the Chiefs of Staff and the Treasury, and approved by the War Cabinet, it was not completed before Lothian's return to Washington. On November 26, I sent him a message, "I am still struggling with my letter to the President, but hope to cable it to you in a few days." In its final form the letter was dated December 8, and was immediately sent to the President. This letter was one of the most important I ever wrote. As it gives a view of the whole situation agreed to by all concerned in London, and as it played a recognisable part in our fortunes, it deserves study.

10 DOWNING S STREET, WHITEHALL,.

December 8, 1940. 8, 1940.MY D DEAR M MR. PRESIDENT,1. As we reach the end of this year, I feel you will expect me to lay before you the prospects for 1941. I do so with candour and confidence, because it seems to me that the vast majority of American citizens have recorded their conviction that the safety of the United States, as well as the future of our two Democracies and the kind of civilisation for which they stand, is bound up with the survival and independence of the British Commonwealth of Nations. Only thus can those bastions of sea-power, upon which the control of the Atlantic and Indian Oceans depend, be preserved in faithful and friendly hands. The control of the Pacific by the United States Navy and of the Atlantic by the British Navy is indispensable to the security and trade routes of both our countries, and the surest means of preventing war from reaching the sh.o.r.es of the United States.2. There is another aspect. It takes between three and four years to convert the industries of a modern state to war purposes. Saturation-point is reached when the maximum industrial effort that can be spared from civil needs has been applied to war production. Germany certainly reached this point by the end of 1939. We in the British Empire are now only about halfway through the second year. The United States, I should suppose, is by no means so far advanced as we. Moreover, I understand that immense programmes of naval, military, and air defence are now on foot in the United States, to complete which certainly two years are needed. It is our British duty in the common interest, as also for our own survival, to hold the front and grapple with the n.a.z.i power until the preparations of the United States are complete. Victory may come before two years are out; but we have no right to count upon it to the extent of relaxing any effort that is humanly possible. Therefore, I submit with very great respect for your good and friendly consideration that there is a solid ident.i.ty of interest between the British Empire and the United States while these conditions last. It is upon this footing that I venture to address you.3. The form which this war has taken, and seems likely to hold, does not enable us to match the immense armies of Germany in any theatre where their main power can be brought to bear. We can, however, by the use of sea-power and air-power, meet the German armies in regions where only comparatively small forces can be brought into action. We must do our best to prevent the German domination of Europe spreading into Africa and into Southern Asia. We have also to maintain in constant readiness in this island armies strong enough to make the problem of an oversea invasion insoluble. For these purposes we are forming as fast as possible, as you are already aware, between fifty and sixty divisions. Even if the United States were our ally, instead of our friend and indispensable partner, we should not ask for a large American expeditionary army. Shipping, not men, is the limiting factor, and the power to transport munitions and supplies claims priority over the movement by sea of large numbers of soldiers.4. The first half of 1940 was a period of disaster for the Allies and for Europe. The last five months have witnessed a strong and perhaps unexpected recovery by Great Britain fighting alone, but with the invaluable aid in munitions and in destroyers placed at our disposal by the great Republic of which you are for the third time the chosen Chief.5. The danger of Great Britain being destroyed by a swift, overwhelming blow has for the time being very greatly receded. In its place there is a long, gradually maturing danger, less sudden and less spectacular, but equally deadly. This mortal danger is the steady and increasing diminution of sea tonnage. We can endure the shattering of our dwellings and the slaughter of our civil population by indiscriminate air attacks, and we hope to parry these increasingly as our science develops, and to repay them upon military objectives in Germany as our Air Force more nearly approaches the strength of the enemy. The decision for 1941 lies upon the seas. Unless we can establish our ability to feed this island, to import the munitions of all kinds which we need, unless we can move our armies to the various theatres where Hitler and his confederate Mussolini must be met, and maintain them there, and do all this with the a.s.surance of being able to carry it on till the spirit of the Continental Dictators is broken, we may fall by the way, and the time needed by the United States to complete her defensive preparations may not be forthcoming. It is, therefore, in shipping and in the power to transport across the oceans, particularly the Atlantic Ocean, that in 1941 the crunch of the whole war will be found. If, on the other hand, we are able to move the necessary tonnage to and fro across salt water indefinitely, it may well be that the application of superior air-power to the German homeland and the rising anger of the German and other n.a.z.i-gripped populations will bring the agony of civilisation to a merciful and glorious end.But do not let us underrate the task.6. Our shipping losses, the figures for which in recent months are appended, have been on a scale almost comparable to that of the worst year of the last war. In the five weeks ending November 3, losses reached a total of 420,300 tons. Our estimate of annual tonnage which ought to be imported in order to maintain our effort at full strength is forty-three million tons; the tonnage entering in September was only at the rate of thirty-seven million tons, and in October, of thirty-eight million tons. Were this diminution to continue at this rate, it would be fatal, unless indeed immensely greater replenishment than anything at present in sight could be achieved in time. Although we are doing all we can to meet this situation by new methods, the difficulty of limiting losses is obviously much greater than in the last war. We lack the a.s.sistance of the French Navy, the Italian Navy, and the j.a.panese Navy, and above all of the United States Navy, which was of such vital help to us during the culminating years. The enemy commands the ports all around the northern and western coasts of France. He is increasingly basing his submarines, flying-boats, and combat planes on these ports and on the islands off the French coast. We are denied the use of the ports or territory of Eire in which to organise our coastal patrols by air and sea. In fact, we have now only one effective route of entry to the British Isles, namely, the northern approaches, against which the enemy is increasingly concentrating, reaching ever farther out by U-boat action and long-distance aircraft bombing. In addition, there have for some months been merchant-ship raiders, both in the Atlantic and Indian Oceans. And now we have the powerful warship raider to contend with as well. We need ships both to hunt down and to escort. Large as are our resources and preparations, we do not possess enough.7. The next six or seven months [will] bring relative battleship strength in home waters to a smaller margin than is satisfactory. Bismarck Bismarck and and Tirpitz Tirpitz will certainly be in service in January. We have already will certainly be in service in January. We have already King George V, King George V, and hope to have and hope to have Prince of Wales Prince of Wales in the line at the same time. These modern ships are, of course, far better armoured, especially against air attack, than vessels like in the line at the same time. These modern ships are, of course, far better armoured, especially against air attack, than vessels like Rodney Rodney and and Nelson, Nelson, designed twenty years ago. We have recently had to use designed twenty years ago. We have recently had to use Rodney Rodney on transatlantic escort, and at any time, when numbers are so small, a mine or a torpedo may alter decisively the strength of the line of battle. We get relief in June, when on transatlantic escort, and at any time, when numbers are so small, a mine or a torpedo may alter decisively the strength of the line of battle. We get relief in June, when Duke of York Duke of York will be ready, and shall be still better off at the end of 1941, when will be ready, and shall be still better off at the end of 1941, when Anson Anson also will have joined. But these two first-cla.s.s modern 35,000-ton also will have joined. But these two first-cla.s.s modern 35,000-ton 3 3 fifteen-inch-gun German battleships force us to maintain a concentration never previously necessary in this war. fifteen-inch-gun German battleships force us to maintain a concentration never previously necessary in this war.8. We hope that the two Italian Littorios Littorios will be out of action for a while, and anyway they are not so dangerous as if they were manned by Germans. Perhaps they might be! We are indebted to you for your help about the will be out of action for a while, and anyway they are not so dangerous as if they were manned by Germans. Perhaps they might be! We are indebted to you for your help about the Richelieu Richelieu and and Jean Bart, Jean Bart, and I daresay that will be all right. But, Mr. President, as no one will see more clearly than you, we have during these months to consider for the first time in this war a fleet action in which the enemy will have two ships at least as good as our two best and only two modern ones. It will be impossible to reduce our strength in the Mediterranean, because the att.i.tude of Turkey, and indeed the whole position in the Eastern Basin, depends upon our having a strong fleet there. The older, unmodernised battleships will have to go for convoy. Thus, even in the battleship cla.s.s we are in full extension. and I daresay that will be all right. But, Mr. President, as no one will see more clearly than you, we have during these months to consider for the first time in this war a fleet action in which the enemy will have two ships at least as good as our two best and only two modern ones. It will be impossible to reduce our strength in the Mediterranean, because the att.i.tude of Turkey, and indeed the whole position in the Eastern Basin, depends upon our having a strong fleet there. The older, unmodernised battleships will have to go for convoy. Thus, even in the battleship cla.s.s we are in full extension.9. There is a second field of danger: The Vichy Government may, either by joining Hitler's New Order in Europe or through some manoeuvre, such as forcing us to attack an expedition despatched by sea against the Free French Colonies, find an excuse for ranging with the Axis Powers the very considerable undamaged naval forces still under its control. If the French Navy were to join the Axis, the control of West Africa would pa.s.s immediately into their hands, with the gravest consequences to our communications between the Northern and Southern Atlantic, and also affecting Dakar and of course thereafter South America.10. A third sphere of danger is in the Far East. Here it seems clear that j.a.pan is thrusting southward through Indo-China to Saigon and other naval and air bases, thus bringing them within a comparatively short distance of Singapore and the Dutch East Indies. It is reported that the j.a.panese are preparing five good divisions for possible use as an overseas expeditionary force. We have today no forces in the Far East capable of dealing with this situation should it develop.11. In the face of these dangers we must try to use the year 1941 to build up such a supply of weapons, particularly of aircraft, both by increased output at home in spite of bombardment, and through ocean-borne supplies, as will lay the foundations of victory. In view of the difficulty and magnitude of this task, as outlined by all the facts I have set forth, to which many others could be added, I feel ent.i.tled, nay bound, to lay before you the various ways in which the United States could give supreme and decisive help to what is, in certain aspects, the common cause.12. The prime need is to check or limit the loss of tonnage on the Atlantic approaches to our island. This may be achieved both by increasing the naval forces which cope with the attacks and by adding to the number of merchant ships on which we depend. For the first purpose there would seem to be the following alternatives:(1) The rea.s.sertion by the United States of the doctrine of the freedom of the seas from illegal and barbarous methods of warfare, in accordance with the decisions reached after the late Great War, and as freely accepted and defined by Germany in 1935. From this, United States ships should be free to trade with countries against which there is not an effective legal blockade.(2) It would, I suggest, follow that protection should be given to this lawful trading by United States forces, i.e., escorting battleships, cruisers, destroyers, and air flotillas. The protection would be immensely more effective if you were able to obtain bases in Eire for the duration of the war. I think it is improbable that such protection would provoke a declaration of war by Germany upon the United States, though probably sea incidents of a dangerous character would from time to time occur. Herr Hitler has shown himself inclined to avoid the Kaiser's mistake. He does not wish to be drawn into war with the United States until he has gravely undermined the power of Great Britain. His maxim is "One at a time."The policy I have ventured to outline, or something like it, would const.i.tute a decisive act of constructive non-belligerency by the United States, and, more than any other measure, would make it certain that British resistance could be effectively prolonged for the desired period and victory gained.(3) Failing the above, the gift, loan, or supply of a large number of American vessels of war, above all destroyers, already in the Atlantic is indispensable to the maintenance of the Atlantic route. Further, could not the United States Naval Forces extend their sea-control of the American side of the Atlantic so as to prevent the molestation by enemy vessels of the approaches to the new line of naval and air bases which the United States is establishing in British islands in the Western Hemisphere? The strength of the United States Naval Forces is such that the a.s.sistance in the Atlantic that they could afford us, as described above, would not jeopardise the control of the Pacific.(4) We should also then need the good offices of the United States and the whole influence of its Government, continually exerted, to procure for Great Britain the necessary facilities upon the southern and western sh.o.r.es of Eire for our flotillas, and still more important, for our aircraft, working to the westward into the Atlantic. If it were proclaimed an American interest that the resistance of Great Britain should be prolonged and the Atlantic route kept open for the important armaments now being prepared for Great Britain in North America, the Irish in the United States might be willing to point out to the Government of Eire the dangers which its present policy is creating for the United States itself.His Majesty's Government would, of course, take the most effective measures beforehand to protect Ireland if Irish action exposed it to German attack. It is not possible for us to compel the people of Northern Ireland against their will to leave the United Kingdom and join Southern Ireland. But I do not doubt that if the Government of Eire would show its solidarity with the democracies of the English-speaking world at this crisis, a Council for Defence of all Ireland could be set up out of which the unity of the island would probably in some form or other emerge after the war.13. The object of the foregoing measures is to reduce to manageable proportions the present destructive losses at sea. In addition, it is indispensable that the merchant tonnage available for supplying Great Britain, and. for the waging of the war by Great Britain with all vigour, should be substantially increased beyond the 1,250,000 tons per annum which is the utmost we can now build. The convoy system, the detours, the zigzags, the great distances from which we now have to bring our imports, and the congestion of our western harbours, have reduced by about one-third the fruitfulness of our existing tonnage. To ensure final victory, not less than three million tons of additional merchant shipbuilding capacity will be required. Only the United States can supply this need. Looking to the future, it would seem that production on a scale comparable to that of the Hog Island scheme of the last war ought to be faced for 1942. In the meanwhile, we ask that in 1941 the United States should make available to us every ton of merchant shipping, surplus to its own requirements, which it possesses or controls, and to find some means of putting into our service a large proportion of merchant shipping now under construction for the National Maritime Board.14. Moreover, we look to the industrial energy of the Republic for a reinforcement of our domestic capacity to manufacture combat aircraft. Without that reinforcement reaching us in substantial measure, we shall not achieve the ma.s.sive preponderance in the air on which we must rely to loosen and disintegrate the German grip on Europe. We are at present engaged on a programme designed to increase our strength to seven thousand first-line aircraft by the spring of 1942. But it is abundantly clear that this programme will not suffice to give us the weight of superiority which will force open the doors of victory. In order to achieve such superiority, it is plain that we shall need the greatest production of aircraft which the United States of America is capable of sending us. It is our anxious hope that in the teeth of continuous bombardment we shall realise the greater part of the production which we have planned in this country. But not even with the addition to our squadrons of all the aircraft which, under present arrangements, we may derive from planned output in the United States can we hope to achieve the necessary ascendancy. May I invite you then, Mr. President, to give earnest consideration to an immediate order on joint account for a further two thousand combat aircraft a month? Of these aircraft, I would submit, the highest possible proportion should be heavy bombers, the weapon on which, above all others, we depend to shatter the foundations of German military power. I am aware of the formidable task that this would impose upon the industrial organisation of the United States. Yet, in our heavy need, we call with confidence to the most resourceful and ingenious technicians in the world. We ask for an unexampled effort, believing that it can be made.15. You have also received information about the needs of our armies. In the munitions sphere, in spite of enemy bombing, we are making steady progress here. Without your continued a.s.sistance in the supply of machine tools and in further releases from stock of certain articles, we could not hope to equip as many as fifty divisions in 1941. I am grateful for the arrangements, already practically completed, for your aid in the equipment of the army which we have already planned, and for the provision of the American type of weapons for an additional ten divisions in time for the campaign of 1942. But when the tide of dictatorship begins to recede, many countries trying to regain their freedom may be asking for arms, and there is no source to which they can look except the factories of the United States. I must, therefore, also urge the importance of expanding to the utmost American productive capacity for small arms, artillery, and tanks.16. I am arranging to present you with a complete programme of the munitions of all kinds which we seek to obtain from you, the greater part of which is, of course, already agreed. An important economy of time and effort will be produced if the types selected for the United States Services should, whenever possible, conform to those which have proved their merit under the actual conditions of war. In this way reserves of guns and ammunition and of airplanes become interchangeable, and are by that very fact augmented. This is, however, a sphere so highly technical that I do not enlarge upon it.17. Last of all, I come to the question of Finance. The more rapid and abundant the flow of munitions and ships which you are able to send us, the sooner will our dollar credits be exhausted. They are already, as you know, very heavily drawn upon by the payments we have made to date. Indeed, as you know, the orders already placed or under negotiation, including the expenditure settled or pending for creating munitions factories in the United States, many times exceed the total exchange resources remaining at the disposal of Great Britain. The moment approaches when we shall no longer be able to pay cash for shipping and other supplies. While we will do our utmost, and shrink from no proper sacrifice to make payments across the Exchange, I believe you will agree that it would be wrong in principle and mutually disadvantageous in effect if at the height of this struggle Great Britain were to be divested of all saleable a.s.sets, so that after the victory was won with our blood, civilisation saved, and the time gained for the United States to be fully armed against all eventualities, we should stand stripped to the bone. Such a course would not be in the moral or economic interests of either of our countries. We here should be unable, after the war, to purchase the large balance of imports from the United States over and above the volume of our exports which is agreeable to your tariffs and industrial economy. Not only should we in Great Britain suffer cruel privations, but widespread unemployment in the United States would follow the curtailment of American exporting power.18. Moreover, I do not believe that the Government and people of the United States would find it in accordance with the principles which guide them to confine the help which they have so generously promised only to such munitions of war and commodities as could be immediately paid for. You may be certain that we shall prove ourselves ready to suffer and sacrifice to the utmost for the Cause, and that we glory in being its champions. The rest we leave with confidence to you and to your people, being sure that ways and means will be found which future generations on both sides of the Atlantic will approve and admire.19. If, as I believe, you are convinced, Mr. President, that the defeat of the n.a.z.i and Fascist tyranny is a matter of high consequence to the people of the United States and to the Western Hemisphere, you will regard this letter not as an appeal for aid, but as a statement of the minimum action necessary to achieve our common purpose.

A table was added showing the losses by enemy action of British, Allied, and neutral merchant tonnage for the periods given.4