Letter to the Foreign Economic Administration on Postwar Policies.

In accordance with our discussions, the following are the major policies which should be put into effect by the Foreign Economic Administration within the scope of its present functions and responsibilities when the military resistance of Nazi Germany is overcome:

1. Export control. With a view to encouraging private trade without interfering with the successful prosecution of the war against Japan, the F.E.A. should relax controls over exports to the fullest extent compatible with continuing war objectives, particularly that of defeating Japan as quickly and effectively as possible.

International trade on as full and free a basis as possible is necessary not only as a sound economic foundation for the future peace, but it is also necessary in order that we may have fuller production and employment at home. Private industry and private trade can, I am sure, produce a high level of international trade, and the Government should assist to the extent necessary to achieve this objective by returning international commerce to private lanes as rapidly as possible.

2. Strategic and critical raw materials. In view of the curtailment which is to be made in our war production after the German phase of the war, the Foreign Economic Administration should consult with the appropriate supply agencies with a view to making an appropriate cut in its foreign procurement program for strategic and critical materials needed in the prosecution of the war.

The adjustment to this reduced program should be made in such a way as to prevent undue and unnecessary financial losses to American taxpayers, to best preserve our foreign relations, and to strengthen the foundation for a high level of international trade in the future.

3. Preclusive buying. The Foreign Economic Administration has been buying abroad materials needed by the Axis to produce munitions and other war materials in order to prevent our enemies from getting them. I understand that the peak of this program is already passed as a result of the victories which have been won by the United Nations. The Foreign Economic Administration should continue to take all necessary steps to prevent Japan from getting strategic and critical materials for the Japanese war program, but it should limit its preclusive purchasing program to achieving that end, observing, of course, any existing commitments.

4. Economic warfare. The Foreign Economic Administration's studies of the enemy's war potential and other phases of economic warfare should be reduced and focused on the war against Japan. This work should be carried on as it has in the past, in close integration with our armed forces.

5. Lend-lease. Lend-lease supplies should continue to be furnished in whatever amounts are necessary for the most effective prosecution of the war. We have waged war on a combined basis with our allies with a success which is being amply demonstrated every day on the battlefields of Europe and the Far East. Until the complete defeat of both Japan and Germany, the flow of lend-lease aid should be continued in the amounts necessary to enable the combined strength of all the United Nations to defeat our common enemies as quickly as possible and with the least loss of life. The amount and nature of the aid necessary after the defeat of Germany is closely tied up with the strategic plans for the Pacific war, and the programs for reconstruction and for reconversion of industry to civilian needs which we and our allies work out on a basis of mutual understanding. The Foreign Economic Administration should aid in carrying out this policy to the fullest extent.

6. Surplus property. As you have done in the past, you should continue to take every reasonable measure to see to it that no unnecessary surpluses develop out of procurement by the Foreign Economic Administration for lend-lease, U.N.R.R.A., or other purposes. In connection with procurement or production for lend-lease or relief and rehabilitation purposes, you should continue to investigate and take up supplies of other Government agencies which are or may be surplus.

7. Control of the war-making power of Germany. You have been making studies from the economic standpoint of what should be done after the surrender of Germany to control its power and capacity to make war in the future. This work must be accelerated, and under the guidance of the Department of State you should furnish assistance in work and when requested to do so in personnel by making available specialists to work with the military authorities, the Foreign Service, and such other American agencies and officials as participate with the United Nations in seeing to it that Germany does not become a menace again to succeeding generations.

8. Reconstruction and future foreign trade. It is in the national interest of the United States, as well as the joint interest of the United States and the other peace-loving Nations, that the destruction and devastation of war be repaired and that the foundations for a secure peace be laid. I understand that you are also preparing to submit for my consideration major proposals along these lines. In varying degrees every workman, every farmer, and every industry in the United States has a stake in the production and flow of manufactured goods, agricultural products, and other supplies to all the other countries of the world. To produce the largest amount of useful goods and services at home, we should export and import as much as possible.

Any marked improvement in the economic well-being of the United States will not only improve the economic well-being of the other peace-loving peoples of the world, but will also aid materially in the building of a durable peace.

With this objective in mind, you should continue to take such action as is necessary or desirable in accordance with the powers delegated to the Foreign Economic Administration and in conformity with the foreign policy of the United States as defined by the Secretary of State.