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Keynes was charged with conducting most of the British side of the negotiations with the US and the third volume of Skidelsky's biography, subtitled 'Fighting for Britain, 1937-1946' is a long chronicle (500 pages) of successive defeats and, from Keynes's point of view, inadequate compromises. There are three parts to the story - the negotiations over Lend-lease, discussions with White on the post-war institutions that were eventually agreed at Bretton Woods, and negotiations over the loan given to Britain when Lend-Lease was abruptly terminated at the end of the war with Japan.

On the face of it, Lend-lease was an extraordinarily generous arrangement. In a speech in November 1941, Churchill said:

'Then came the majestic policy of the President and Congress of the United States in passing the Lease-Lend Bill, under which, in two successive enactments, about £3,000,000,000 was dedicated to the cause of world freedom, without - mark this, because it is unique - without the setting up of any account in money. Never again let us hear the taunt that money is the ruling power in the hearts and thoughts of the American democracy. The Lease-Lend Bill must be regarded without question as the most unsordid act in the whole of recorded history.' (5)

(5) By November a Lend-lease arrangement had been made with the USSR so this is included in the £3,000,000,000 'dedicated to the cause of freedom.' The quote is well known but I have taken it from James Lachlan MacLeod: The Most Unsordid Act in History? on the American History News network website.

Roosevelt, selling it to the US public, likened it to lending a neighbour a fire hose to put out a dangerous fire. Though there was of course the understanding that the fire hose was unlikely to be returned and would probably be destroyed by the fire - even probably before it reached the neighbour if the U-boats got at it. Roosevelt's isolationist opponent Robert Taft said that 'lending' arms to a neighbour was a bit like lending chewing gum. You really didn't want it back after it had been used.

Roosevelt announced the policy in December 1940. It passed Congress in March 1941 and came into effect in April, by which time it was unclear if Britain would be able to pay for orders it had already placed. This was a period before the German invasion of the Soviet Union when it must have seemed almost out of the question that Britain could actually win the war. The most that could be hoped for was just that Britain wouldn't actually be forced to make terms. Churchill certainly thought that actual victory was impossible unless the US joined in and it seems improbable that Roosevelt would have disagreed. But in the election fought in November 1940 he had promised - in a manner reminiscent of Woodrow Wilson before him - that he would not 'send American boys into any foreign wars.' The argument for Lend Lease was that Britain had to be kept in the war to keep the US out of it, implying that if Britain gave up, the US would have to intervene. But this did not make much sense since, had Britain come to terms with Germany, the US would have been deprived of the means of conducting a European war - it would have been deprived of what Göring (I think) called the aircraft carrier moored off the coast of Europe. As was pointed out at the time by isolationists the policy only made sense if Roosevelt planned to enter the war. Under Lend Lease goods could be transferred to the UK in American ships and Skidelsky (p.101), pointing out that Roosevelt had been Assistant  Secretary of the Navy in 1917, speculates that he may have hoped that Germany attacking American ships would provide a pretext for America joining the war. In the event, the need became less pressing when Hitler went to war with the Soviet Union in June. A Lend Lease arrangement was extended to the Soviet Union in October. Hitler declared war on the US, in tandem with Japan, in December.