124.611/273
Memorandum by the Ambassador in the Soviet Union ( Bullitt ), Temporarily in Washington
At the insistence of Ambassador Troyanovsky I took lunch with him today. In the course of a conversation of one and one-half hours we discussed the following matters:
. . . . . . . . . . . . . .
(8) As I rose to leave Mr. Troyanovsky referred to the negotiations between the Soviet Government and the Government of the United States with regard to debts, claims and credits. I replied that he would have an opportunity to discuss that question with the Secretary of State tomorrow. He laughed nervously and said that he was afraid to discuss the question with the Secretary of State, that he feared their conversation might result disastrously, that it might end the possibility of establishing close friendship between [Page 169] the Soviet Union and the United States. He then said, “Could I not, instead of going to the Department of State, just have private conversations with you here?” I replied that private conversations with me on the subject were absolutely out of the question and that he would have to come to the Department of State and take the consequences of Litvinov’s policy. He appeared to be greatly depressed by this remark. He then said, “You know, when I got back to Moscow I was scolded very severely by Litvinov, Rosengoltz and Grinko for making my last offer to the Secretary of State;5 that is to say, for offering to take one hundred million dollars as a loan and one hundred million dollars in credits.” He then alleged that France had offered to settle on the same basis that we had offered. I expressed my belief that such a settlement would be impossible for France as it would necessitate either a reduction of French claims to an impossible minimum or a magnifying of French credits to astronomical figures. Troyanovsky replied, “No. The French have offered to settle all their claims against the Soviet Union for a payment of five hundred million dollars and have offered to give us a credit of one billion dollars for purchases in France at a total rate of seven percent interest, a portion of the interest rate to be applied to extinguish the acknowledged indebtedness of five hundred million dollars. We have refused this French proposal.”
He then said that he would like me to understand the actual state of mind of the Soviet Government with regard to credits. He said that Stalin had told him that in the future he intended to have the Soviet Government pay cash, gold, for all ordinary purchases made abroad and desired credits only if they could be obtained in such a way as to raise greatly the standard of living in the Soviet Union. He insisted that Stalin was intensely interested in increasing the production of consumers’ goods and alleviating the general condition of the Russian people. He once more said that Stalin earnestly desired close friendship with the United States. I replied that it was too bad that responsible members of the Soviet Government did not seem to share Stalin’s views and added that I had warned Litvinov as earnestly and vigorously as I could that his present policy might easily bring to an end all possibility of intimate and fruitful cooperation between our countries.
Troyanovsky again seemed most depressed.
. . . . . . . . . . . . . .
Respectfully submitted,