How long can Britain hold out without Lend Lease?

Discussions on alternate history, including events up to 20 years before today. Hosted by Terry Duncan.
Politician01
Member
Posts: 441
Joined: 02 Sep 2011, 07:56

How long can Britain hold out without Lend Lease?

#1

Post by Politician01 » 22 Aug 2012, 11:33

The last gold reserves the UK had left the country in early 1941 since then Britain was practically dependent on LL from the US.

So how long can Britain continue the war if the US wants to see cash for all products?

In this scenario I assume that the Isolationist are far more influental than in OTL - Pearl Harbour happens but Hitler doesnt declare war on the US since there was no warmongering from the US in 1940/41 against Germany.

User avatar
LWD
Member
Posts: 8618
Joined: 21 Sep 2005, 22:46
Location: Michigan

Re: How long can Britain hold out without Lend Lease?

#2

Post by LWD » 22 Aug 2012, 14:28

In the situation mentioned the US and Britain would certainly be allies at least in the Pacific. The implication is that there would be at least some aid delivered that way.

Is LL even a requirement for Britain survival? Especially if the US continues to provide escorts half way across the Atlantic and such.


Trackhead M2
Member
Posts: 1004
Joined: 24 Mar 2012, 17:48
Location: North Utica, IL

Re: How long can Britain hold out without Lend Lease?

#3

Post by Trackhead M2 » 22 Aug 2012, 14:47

Politician01 wrote:The last gold reserves the UK had left the country in early 1941 since then Britain was practically dependent on LL from the US.

So how long can Britain continue the war if the US wants to see cash for all products?

In this scenario I assume that the Isolationist are far more influental than in OTL - Pearl Harbour happens but Hitler doesnt declare war on the US since there was no warmongering from the US in 1940/41 against Germany.
Dear P01,
But what about trading more British assets to the US for the goods. There would be possibilities for Britain to give trade concessions to the US on natural resources from it colonies worldwide.
Strike Swiftly,
TH-M2

User avatar
stg 44
Member
Posts: 3376
Joined: 03 Dec 2002, 02:42
Location: illinois

Re: How long can Britain hold out without Lend Lease?

#4

Post by stg 44 » 22 Aug 2012, 15:00

Politician01 wrote:The last gold reserves the UK had left the country in early 1941 since then Britain was practically dependent on LL from the US.

So how long can Britain continue the war if the US wants to see cash for all products?

In this scenario I assume that the Isolationist are far more influental than in OTL - Pearl Harbour happens but Hitler doesnt declare war on the US since there was no warmongering from the US in 1940/41 against Germany.
Britain was broke by January 1941. In March 1941 when the first LL shipments were delivered, the US was still demanding payment upfront, which Belgium had to cover from her US holdings. So I assume that even these would run out by May 1941. That means Britain runs out of US material by May 1941, which was the source of about 60% of her oil (Mexico and South America were the other 40% and without cash they wouldn't ship either), about 20-30% of her food, and virtually the sole supplier of British Aluminum among other non-ferrous metals.
Britain was heavily dependent on US goods and raw materials in WW2 and without LL Britain is in serious trouble and won't be able to survive without it. They will probably need to make peace some time in 1941 before the US enters the war against Japan and Germany probably won't declare war on the US without LL to Britain.

Though Britain and the US would both be fighting Japan, if the US is for some reason not giving Britain LL to fight Germany, Britain probably won't get much more than what they need to fight Japan, so don't expect Britain to hop back into the war against Germany, nor will Churchill be in power to push for that after Britain runs out of cash.

US escorts don't matter without LL, because without LL there is no trade with the US after about May 1941 without cash for cash-and-carry.

User avatar
BDV
Member
Posts: 3704
Joined: 10 Apr 2009, 17:11

Re: How long can Britain hold out without Lend Lease?

#5

Post by BDV » 22 Aug 2012, 15:25

A short answer is - for a very long time.

If Barbarossa happens as per OTL - forever.
That means Britain runs out of US material by May 1941, which was the source of about 60% of her oil (Mexico and South America were the other 40% and without cash they wouldn't ship either), about 20-30% of her food, and virtually the sole supplier of British Aluminum among other non-ferrous metals.
What, did the oil wells of Mosul suddenly gone dry? Did South Africa's pastures turn to desert? Did Canada's wheat fields turn to tundra?
Nobody expects the Fallschirm! Our chief weapon is surprise; surprise and fear; fear and surprise. Our 2 weapons are fear and surprise; and ruthless efficiency. Our *3* weapons are fear, surprise, and ruthless efficiency; and almost fanatical devotion

Politician01
Member
Posts: 441
Joined: 02 Sep 2011, 07:56

Re: How long can Britain hold out without Lend Lease?

#6

Post by Politician01 » 22 Aug 2012, 15:43

BDV wrote:A short answer is - for a very long time.

If Barbarossa happens as per OTL - forever.
With what money?

And when Barbarossa happens Britain will be in an even worse situation since uncle Joe will demand material as he did in OTL - where is Britain gonna take all the money to pay all her imports?

User avatar
LWD
Member
Posts: 8618
Joined: 21 Sep 2005, 22:46
Location: Michigan

Re: How long can Britain hold out without Lend Lease?

#7

Post by LWD » 22 Aug 2012, 15:54

stg 44 wrote: ... Britain was heavily dependent on US goods and raw materials in WW2 and without LL Britain is in serious trouble and won't be able to survive without it.
While Britain certainly reiceved a lot of US goods and raw materials not all were supplied vis LL nor was LL the only mechanism that was possible.
Though Britain and the US would both be fighting Japan, if the US is for some reason not giving Britain LL to fight Germany, Britain probably won't get much more than what they need to fight Japan, so don't expect Britain to hop back into the war against Germany, nor will Churchill be in power to push for that after Britain runs out of cash.
If the US say agrees that the USN will take full responsibility for the Pacfic then that frees up a lot of British naval assets. Then the US could say arm the various Australian, New Zealand, and Indian formations needed in the Pacfic which means any already mobilised and armed could head for Europe. Further more there could be an agreement between Britain and the US that would include extra material to cover the cost of British resources used in the Pacfic.
US escorts don't matter without LL, because without LL there is no trade with the US after about May 1941 without cash for cash-and-carry.
That is hardly correct. Much of the trade between the US and Britain wasn't LL trade, furthermore there would be trade from Canada and the reset of the world that would benefit from being escorted across the Atlantic.

Then there's a number of basic problems with the whole premise. Note that the LL act passed with a significant majority in March of 41. Consider that even earlier polls showed that the majority of Americans realised that a British loss was not in the interest of the US that Britain loose the war (confidence in a British victory being the main reason that they didn't view a US entry into it as necessary). Then look at what happened to the already tattered isolationist movement in June of 41.

User avatar
stg 44
Member
Posts: 3376
Joined: 03 Dec 2002, 02:42
Location: illinois

Re: How long can Britain hold out without Lend Lease?

#8

Post by stg 44 » 22 Aug 2012, 16:01

BDV wrote:A short answer is - for a very long time.

If Barbarossa happens as per OTL - forever.
That means Britain runs out of US material by May 1941, which was the source of about 60% of her oil (Mexico and South America were the other 40% and without cash they wouldn't ship either), about 20-30% of her food, and virtually the sole supplier of British Aluminum among other non-ferrous metals.
What, did the oil wells of Mosul suddenly gone dry? Did South Africa's pastures turn to desert? Did Canada's wheat fields turn to tundra?
Middle East oil was not used in Britain, because it was too far away and the British were desperate to optimize shipping. After 1939 100% of British oil came from the Americas (US, Mexico, and Venezuela) according to the specialist volume on oil of British official history of their war economy. Their oil tankers were getting sunk at a much higher rate than their other shipping, which made it critical that oil come from its closest source, which was the Americas. Travel to the Middle East, thanks to the detour around South Africa that Italian entry into the war necessitated, made the trip over 4 times longer than a trip to the Gulf of Mexico. South Africa was over 2 times farther than New York or Canada for food at a time when British shipping only made 4 trips a year trans-Atlantic-ly.
So 2 trips versus 4 and much more exposure to German merchant raiders, with far less escort.
Canada only had a year's worth of grain stocks for Britain and to conserve cash stocks Britain had been drawing on that grain since 1939. So by September 1940 that excess is pretty much drying up. Ireland had 13 weeks of excess food for sale, but too requires cash, not credit.

User avatar
stg 44
Member
Posts: 3376
Joined: 03 Dec 2002, 02:42
Location: illinois

Re: How long can Britain hold out without Lend Lease?

#9

Post by stg 44 » 22 Aug 2012, 16:17

LWD wrote:
stg 44 wrote: ... Britain was heavily dependent on US goods and raw materials in WW2 and without LL Britain is in serious trouble and won't be able to survive without it.
While Britain certainly reiceved a lot of US goods and raw materials not all were supplied vis LL nor was LL the only mechanism that was possible.
Though Britain and the US would both be fighting Japan, if the US is for some reason not giving Britain LL to fight Germany, Britain probably won't get much more than what they need to fight Japan, so don't expect Britain to hop back into the war against Germany, nor will Churchill be in power to push for that after Britain runs out of cash.
If the US say agrees that the USN will take full responsibility for the Pacfic then that frees up a lot of British naval assets. Then the US could say arm the various Australian, New Zealand, and Indian formations needed in the Pacfic which means any already mobilised and armed could head for Europe. Further more there could be an agreement between Britain and the US that would include extra material to cover the cost of British resources used in the Pacfic.
US escorts don't matter without LL, because without LL there is no trade with the US after about May 1941 without cash for cash-and-carry.
That is hardly correct. Much of the trade between the US and Britain wasn't LL trade, furthermore there would be trade from Canada and the reset of the world that would benefit from being escorted across the Atlantic.

Then there's a number of basic problems with the whole premise. Note that the LL act passed with a significant majority in March of 41. Consider that even earlier polls showed that the majority of Americans realised that a British loss was not in the interest of the US that Britain loose the war (confidence in a British victory being the main reason that they didn't view a US entry into it as necessary). Then look at what happened to the already tattered isolationist movement in June of 41.
Agreed about the premise of this What If. Its virtually impossible to imagine.
When you say much of the trade with the US wasn't LL, what is "much"? And after what year was that trade? Of course there was reverse LL, which was used to get more US goods, but that depended on US raw materials.
As to trade with the rest of the world...they didn't have what the US had and most of it was too far away to really help the British. The reduction in imports from not having the US build shipping (specifically oil tankers were in very short supply) would be nearly fatal, but couple that with needing to travel 2-5x as far to get those materials results in a halving or worse of imports for Britain. Plus Canada wasn't as developed in 1940 as now, so didn't have most of the necessary resources or labor to feed British demands. Grain stocks were pretty much depleted by December 1940 in Canada, so while there was some excess to be shipped, it wasn't enough to cover the gap, even when combined with Irish stocks.

Plus going farther afield would increase risk of German raiders, while making convoys impractical and escorts very difficult, considering warship oil-based fuel requirements compared to coal-fired merchant shipping. South America wouldn't necessarily sell on credit and going to South America was roughly twice the distance to Britain. South Africa was worse, and India was 4 times as far. Halving and quartering shipping missions due to distance would make the German trade war more effective, especially as escorting vessels over the whole course of the journey would be impossible. Add in a couple of German raiders and shipping could be shut down for periods too. Plus there was Japanese aggressive acts to worry about during 1940-1 and the need to defend the colonies. India too was suffering from famine during WW2, so couldn't really provide food either.

User avatar
BDV
Member
Posts: 3704
Joined: 10 Apr 2009, 17:11

Re: How long can Britain hold out without Lend Lease?

#10

Post by BDV » 22 Aug 2012, 16:29

Politician01 wrote:And when Barbarossa happens Britain will be in an even worse situation since uncle Joe will demand material as he did in OTL - where is Britain gonna take all the money to pay all her imports?
Abolishing the special arrangements of LL does not imply the abolishment of other sources of credit. Also, with Europe blockadeered, what will South America do with its excess production? Why would South America not sell Great Britain on credit?

As a debtor, Great Britain had proven its trustworthiness after WWI, no?
Nobody expects the Fallschirm! Our chief weapon is surprise; surprise and fear; fear and surprise. Our 2 weapons are fear and surprise; and ruthless efficiency. Our *3* weapons are fear, surprise, and ruthless efficiency; and almost fanatical devotion

User avatar
stg 44
Member
Posts: 3376
Joined: 03 Dec 2002, 02:42
Location: illinois

Re: How long can Britain hold out without Lend Lease?

#11

Post by stg 44 » 22 Aug 2012, 16:34

BDV wrote:
Politician01 wrote:And when Barbarossa happens Britain will be in an even worse situation since uncle Joe will demand material as he did in OTL - where is Britain gonna take all the money to pay all her imports?
Abolishing the special arrangements of LL does not imply the abolishment of other sources of credit. Also, with Europe blockadeered, what will South America do with its excess production? Why would South America not sell Great Britain on credit?

As a debtor, Great Britain had proven its trustworthiness after WWI, no?
No, Britain pretty much welched on its unsecured loans from 1917 on. Selling to the British on unsecured credit was obviously a bad deal, especially when Britain is poised to lose and Germany looks like the better bet for the future, as many South American countries, like the massive food exporter Argentina, seemed to think. Its one thing to horde its production for when the war is over, withholding goods from Britain would mean it would be over sooner, and quite another to give away free stuff to a country that is broke and has little prospects for winning a war and paying back its debt holders.

http://news.bbc.co.uk/2/hi/uk_news/magazine/4757181.stm
British resentment
Many Britons felt that the US loans should be considered as part of its contribution to the World War I effort.
"The Americans lent Britain a lot. Britain resented making payments," says historian Dr Patricia Clavin, of Oxford University.
And although Britain was unable to pay its debts, it was also owed the whacking sum of £2.3bn.

OUTSTANDING WWI LOANS
Britain owed to US in 1934: £866m
Adjusted by RPI to 2006: £40bn
Other nations owed Britain: £2.3bn
Adjusted by RPI to 2006: £104bn

These loans remain in limbo. The UK Government's position is this: "Neither the debt owed to the United States by the UK nor the larger debts owed by other countries to the UK have been serviced since 1934, nor have they been written off."

So in a time when debt relief for Third World nations is recurrently in the news, the UK still has a slew of unresolved loans from a war that finished 88 years ago. HM Treasury's researchers descended into its archives and were unable to even establish which nations owe money. The bulk of the sum would probably have gone to allies such as nations of the Empire fighting alongside Britain, says Dr Clavin.
Nor is HM Treasury able to say why the UK never repaid its WWI debts - even though, at the time, many Americans took a dim view of repayments being suspended, for they had bought bonds which stood little chance of showing a return on their investment.

User avatar
LWD
Member
Posts: 8618
Joined: 21 Sep 2005, 22:46
Location: Michigan

Re: How long can Britain hold out without Lend Lease?

#12

Post by LWD » 22 Aug 2012, 16:49

stg 44 wrote:... When you say much of the trade with the US wasn't LL, what is "much"?
Well LL only applied to defence related material. Normal commercial traffic would continue. I would suspect that included a not insignificant amount of raw material including food. How much is a good question though. Indeed the whole title "Lend Lease" implies manufactured goods rather than raw material although the latter clearly was sent. In essence LL constitured a US backed loan much of which was to be forgiven. Other loan mechanisms were available although they would have been more limiting in all probbility. Indeed based on table 7 (page 25) in http://www2.warwick.ac.uk/fac/soc/econo ... otwar3.pdf ~55% of Britains deficits during the war years were offset by "US grants".
As to trade with the rest of the world...they didn't have what the US had and most of it was too far away to really help the British.
??? Canada? How about Argentine beef? Oil imports from the Caribean?
The reduction in imports from not having the US build shipping (specifically oil tankers were in very short supply) would be nearly fatal,
Why wouldn't US built shipping be available?
... Plus Canada wasn't as developed in 1940 as now, so didn't have most of the necessary resources or labor to feed British demands. Grain stocks were pretty much depleted by December 1940 in Canada, so while there was some excess to be shipped, it wasn't enough to cover the gap, even when combined with Irish stocks.
Grain stocks are rather self renewing are they not? Canada's grain production increased over the course of the war as well. Then there's the point that Britain was never near to famine. Canadian manufacturing also increased rapidly over the course of the war. A serious question is what "gap" you are refering to. Certainly the British would have wanted mroe reserves than they were likely to get in these circumstances but would the lack be critical? Especially in the short term..
Plus going farther afield would increase risk of German raiders, while making convoys impractical and escorts very difficult, considering warship oil-based fuel requirements compared to coal-fired merchant shipping.
Convoys directly to Britain may have been impractical but neutral shipping stopping in at US ports (or for that matter Canadian or even Carribean ports then joining convoys would have limited the need.
South America wouldn't necessarily sell on credit
Although they probably would. Especially with "creative terms". For instance Argentina would probably have jumped at the chance to do so if the loan was secured by the Falklands/Malvinas.
... India too was suffering from famine during WW2, so couldn't really provide food either.
While parts of India suffered from famine overall I think you will find India produced a surplus of food. The famine was due in large part to poor allocation of food resources from what I remember. On the other hand food export was hardly India's forte in any case.

User avatar
LWD
Member
Posts: 8618
Joined: 21 Sep 2005, 22:46
Location: Michigan

Re: How long can Britain hold out without Lend Lease?

#13

Post by LWD » 22 Aug 2012, 16:53

stg 44 wrote:
BDV wrote: ... As a debtor, Great Britain had proven its trustworthiness after WWI, no?
No, Britain pretty much welched on its unsecured loans from 1917 on.
I'd like to see some sources on this one way or the other. The debts owed the US for WWI can't be simply generalised to all debts in the interwar period.

User avatar
BDV
Member
Posts: 3704
Joined: 10 Apr 2009, 17:11

Re: How long can Britain hold out without Lend Lease?

#14

Post by BDV » 22 Aug 2012, 16:59

stg 44 wrote:Middle East oil was not used in Britain, because it was too far away and the British were desperate to optimize shipping. After 1939 100% of British oil came from the Americas (US, Mexico, and Venezuela) according to the specialist volume on oil of British official history of their war economy.
So both Persian and Mesopotamian oil were available. Instead Great Britain forks over its gold to the US and Mexico oil companies that had lost their european customers. Sounds more like greasing the squeaky wheel rather than Britain in dire straits to me.

Their oil tankers were getting sunk at a much higher rate than their other shipping, which made it critical that oil come from its closest source, which was the Americas.
The area of greatest danger, North Atlantic, was the same for both routes. And its mostly not "their" tankers, but Norwegian tankers, thanks to Weserubung. Well, depending what the meaning of the word "their" is, I guess.

Travel to the Middle East, thanks to the detour around South Africa that Italian entry into the war necessitated, made the trip over 4 times longer than a trip to the Gulf of Mexico. South Africa was over 2 times farther than New York or Canada for food at a time when British shipping only made 4 trips a year trans-Atlantic-ly. So 2 trips versus 4 and much more exposure to German merchant raiders, with far less escort.
German merchant raiders are a finite nuisance. Once all of them are sunk or chased away, that threat ends. But, if one needs to spend the gold on aluminum and tungsten, oil will have to come from within Empyr.

Canada only had a year's worth of grain stocks for Britain and to conserve cash stocks Britain had been drawing on that grain since 1939. So by September 1940 that excess is pretty much drying up.
You know that for a fact, or you're just speculating? What happens to the 1940 crop, which Canada can't sell to her continental European clients no more?


P.S.
And imagine, once the airplane production is set, what happens should Britain sell 45 Spit IIs to Argentina for a shipment of cattle meat? Methinks everyone in the South America would beat a path to Britain's door (gotta keep up with the Gauchos!)
Nobody expects the Fallschirm! Our chief weapon is surprise; surprise and fear; fear and surprise. Our 2 weapons are fear and surprise; and ruthless efficiency. Our *3* weapons are fear, surprise, and ruthless efficiency; and almost fanatical devotion

ChristopherPerrien
Member
Posts: 7051
Joined: 26 Dec 2002, 01:58
Location: Mississippi

Re: How long can Britain hold out without Lend Lease?

#15

Post by ChristopherPerrien » 22 Aug 2012, 18:11

A funny topic, well disregarding all the free (a.k.a. lend lease) food and oil; The British won't have any Grants or Shermans in North Africa, so you can write off all the Med by the end of 1942.

I.E. No 500+ M3/M4's at EL Alamein to beat that Gerrman tank horde :roll: of 80 -III's and IV's, and Monty does not get his freebie "Military genius rep", and ends up being put in the "Percival" category.

Post Reply

Return to “What if”