File No. 861.51/133

The Secretary of State to the Ambassador in Russia (Francis)


1313. From Secretary of Treasury:

Replying to your cable April 6 please advise Minister Finance that Congress will probably pass a bill shortly authorizing the Secretary Treasury, with approval of President, to extend direct loans to those foreign governments which can make use of financial aid most effectively in fighting the common enemy. There is the friendliest disposition towards Russia whose Government we are most anxious to support and assist in every practicable and effective way. We shall have to consider the situation of each government and the use it can make of financial aid in order to determine where such aid can be most wisely and powerfully employed. Please secure as much information as possible about the determination and ability of the Russian Government to carry on the war, if financial aid is forthcoming, and cable the fullest possible information. Inform Minister Finance that whatever financial aid is extended will be extended by Treasury of the United States direct to the borrowing government. Loans will be made at the same interest rate the Government of the United States has to pay on its own bonds. The rate of interest will probably not exceed 3½ or 4 per cent. Russian obligations would be taken if the loan is made at par, without any discount whatever, and at the rate of interest indicated. The general terms and conditions of the loans will be determined by the Secretary of Treasury with approval of the President. The obligations of the foreign government, to which the loan is made, will be purchased for the Treasury of the United States, and the maturities of such obligations will be jointly agreed upon.