Front Page > World Page

Page 1 of 2 next » | Email | Print | Subscribe

Add To Insider Newsclips | Click-2-Listen

advertisement

Britain free from WWII payments

By Al Webb
THE WASHINGTON TIMES
January 4, 2007

British Prime Minister Tony Blair  (AFP/Getty Images)

---

LONDON -- More than six decades after the fact, Britain has finally paid back the billions of dollars it had borrowed from the United States and Canada to help pay for rebuilding the country after World War II.
    At the click of a few computer keys in London on the last business day of 2006, $83.25 million was sent electronically winging to Washington and $22.7 million to Ottawa, to free Britain from annual installments it occasionally has struggled to pay.
    The original loan of $4.34 billion -- the equivalent of $27 billion in today's money -- was negotiated by a London team headed by economic mastermind John Maynard Keynes in 1945 to stave off the bankruptcy that posed a serious threat to Britain in the wake of the war's wreckage.
    The Canadian share of the loan was $1.2 billion.
    The loan was paid off in 50 installments, the last of which leaves Britain free of that debt for the first time since a devastated Nazi Germany surrendered to Allied forces more than 61 years ago.
    British Economic Secretary Ed Balls hailed the dispatch of that last payment on Dec. 29, telling journalists, "We finally honor our commitments to the U.S. and Canada for the support they gave us 60 years ago."
    "It was vital support which helped Britain defeat Nazi Germany and secure peace and prosperity in the postwar period," Mr. Balls said.
    In fact, it was much more than that. World War II had left Britain an economic mess -- a "financial Dunkirk," as Mr. Keynes put it -- and with the abrupt termination in September 1945 of the lend-lease arrangement that had it afloat through the hostilities, the country was on the verge of collapse.
    Under the Lend-Lease Act of 1941, signed by President Franklin Delano Roosevelt, Washington sent war supplies to allies. Britain received most of that assistance -- $31.4 billion out of the total $50.1 billion. Other major countries that benefited from the Lend-Lease Act were the Soviet Union ($11.3 billion), France ($3.2 billion) and China ($1.6 billion).
    No payment was required for supplies sent under the program. The allies' compensation came in the form of services, rent and use of air bases.
    However, Washington suddenly terminated the lend-lease shipments on Sept. 2, 1945, with goods still in transit, forcing Britain to negotiate new loans from the United States and Canada for reconstruction.
    The large consignment of goods in transit or already in Britain were sold to Britain for about 10 cents on the dollar under the new 50-year loan agreement.

Page 1 of 2 next » | Email | Print | Subscribe

Add To Insider Newsclips | Click-2-Listen

Front Page > World Page

Want to use this article? Click here for options! Copyright 2007 The Washington Times