800.51W89 U.S.S.R./124: Telegram
The Ambassador in the Soviet Union (Bullitt) to the Secretary of State
[Received September 16—10:50 a.m.]
304. My telegram No. 292, September 9. Radek informed me today that he had read the entire dossier on debts and credits in Stalin’s office. He said that in so far as he could judge Litvinov had reported the facts to Stalin without noteworthy distortions.
Radek added that Voroshilov, after a long conversation with me about 6 weeks ago had made a detailed report to Stalin on our position and had demanded that our proposals should be accepted. He said that Stalin had replied:
- (1)
- that he agreed with Voroshilov that removal of all obstacles to close cooperation between the United States and the Soviet Union was of prime importance for the maintenance of peace in the Far East,
- (2)
- that at the moment however it was even more important to arrange for the protection of the rear of the Soviet Union in case of Japanese attack by putting through the understanding with France and establishing a friendly relationship with England,
- (3)
- that therefore nothing should be done at the moment which might anger France and England,
- (4)
- that the Soviet Union could not possibly agree to pay the colossal claims of France and England by extra interest on commercial returns,
- (5)
- that if an arrangement were made to pay the United States’ claims by extra interest on commercial credits the Soviet Union could not refuse to make a similar arrangement with France and England without greatly angering them and jeopardizing the relationship of the Soviet Union with them,
- (6)
- that therefore he could not accept an agreement based solely on extra interest on commercial credits but could accept only an agreement which he could offer to France and England also with the certainty that they would not be in a position to accept it.
Radek added that Stalin’s position was so clear that he believed the present moment was one to be employed in working out a new [Page 148] formula which though satisfactory to us would be inacceptable to France and England.
Radek this afternoon talked with such frankness and intimacy about many other subjects that I am convinced that his statement with regard to Stalin’s position was accurate. Under the circumstances it seems to me that it would be most unwise for me to have a conversation with Stalin now.
If we can contrive a formula to meet this particular difficulty I feel that we shall be on our way to a solution although the Soviet Government will doubtless continue to haggle over interest rates.