800.51W89 U.S.S.R./78: Telegram
The Ambassador in the Soviet Union (Bullitt) to the Secretary of State
[Received 10 p.m.]
177. Your 149, July 7, 3 p.m. I informed Litvinov this morning that Troyanovsky had not initiated any discussions at the Department. He replied that Troyanovsky again had misunderstood his telegraphic instructions and read a number of telegrams to prove this point. He said that he had written Troyanovsky a long letter which has been sent by courier on July 7th and should reach Troyanovsky on July 19th. He promised that he would telegraph Troyanovsky today ordering him to begin conversations with the Department as soon as he had received the letter which was so explicit that it could not be misunderstood.
He then read to me portions of the letter. In it he ordered Troyanovsky to have no discussions except on the basis of a flat 7 percent credit from the Export-Import Bank or a promise by the Bank to discount 100-percent Soviet obligations given in payment of purchases in the United States. He stated that his Government was willing to consummate the purchases it would expect to make with credits so extended but that his Government positively would not accept any agreement which involved credits from the corporations making sales. I replied that I believed his instructions to Troyanovsky would make Troyanovsky’s task impossible but that nevertheless I felt discussions would be valuable if only to clarify the attitudes of both Governments.
I again called his attention to the danger that intransigence of this sort might destroy the small plant of goodwill toward the Soviet Union which had begun to grow in America. He replied as follows:
“We sincerely desire the best possible relations with the United States but we cannot jeopardize our relations with the rest of the world. The claims against the Soviet Union of England, France, Germany and various other nations are far larger than the claims of [America?]. Those claims have now been shelved and forgotten but the moment we make any settlement with the United States all other nations will demand immediate settlements. We must therefore make a settlement with the United States which will be on a basis that no other nation will be able to accept. The distinction with regard to the payment being only on the Kerensky debt might be good in a court of law but is no good in international relations. It is physically impossible for either the British, French or Germans to lend us double the amount of their claims, the sum is too large. Therefore, we can settle with [Page 116] United States on that basis. If we were to make a settlement with the United States on the basis of additional interest on private credits we should have to make additional interest payments on all private credits obtained in England, France, Germany and elsewhere. That is impossible.”
Second part follows in my 178.37
- Infra.↩