AUTOMOTIVE HISTORY – JANUARY 31, 1942 - THE LEND - LEASE ACT
Under the Lend-Lease Act, the US auto industry was to transition from building personal and commercial cars and trucks to war vehicles, machinery and weapons by early 1942. It was on this day in 1942 that the last pre-war Chryslers, Plymouths and Studebakers would roll off of their respective assembly lines. The last civilian car produced in America prior to a full switch into war production was a Ford sedan, which would leave the factory two days later.
Due to a government ration on automobile sales, as of February 22 there was a stockpile of approximately 520,000 new cars that would be available for purchase by those the government deemed “essential drivers,” such as doctors and police officers. Following the end of civilian production nearly all automotive factories were retooled to build tanks, trucks, planes, bombs, boats, guns, ammunition, helmets and all other materials necessary for battle.
Congress had not authorized the gift of supplies delivered after the cutoff date, so the U.S. charged for them, usually at a 90% discount. Large quantities of undelivered goods were in Britain or in transit when Lend-Lease terminated on September 2, 1945. Britain wished to retain some of this equipment in the immediate post war period. In 1946, the post-war Anglo-American loan further indebted Britain to the U.S. Lend-Lease items retained were sold to Britain at 10% of nominal value, giving an initial loan value of ￡1.075 billion for the Lend-Lease portion of the post-war loans. Payment was to be stretched out over 50 annual payments, starting in 1951 and with five years of deferred payments, at 2% interest. The final payment of $83.3 million (￡42.5 million), due on December 31, 2006 (repayment having been deferred in the allowed five years and during a sixth year not allowed), was made on December 29, 2006 (the last working day of the year). After this final payment Britain's Economic Secretary to the Treasury formally thanked the U.S. for its wartime support.
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