Memorandum by the Chief of the Division of Eastern European Affairs ( Kelley )

Conversation: The Ambassador of the Soviet Union, Mr. Troyanovsky;
The Assistant Secretary of State, Mr. Moore;
Mr. Robert F. Kelley.

A discussion took place with the Soviet Ambassador with regard to various matters affecting trade relations between the United States and the Soviet Union. The question of debts and claims was touched upon. The Ambassador said that he had had a telegram from Litvinoff stating that he had discussed this question briefly with Ambassador Bullitt and that Ambassador Bullitt had rejected very strongly the idea of a renewable five-year credit. Mr. Moore stated that Ambassador Bullitt had reported briefly his conversation with Litvinoff and he informed Mr. Troyanovsky of the substance of Ambassador Bullitt’s account of the conversation.

The Ambassador said that, while the Soviet Government insisted on a loan, it might be willing to agree to a loan for five years with the understanding that it would be extended for a further term of five years at the end of three successive five-year periods. It was pointed out that such an arrangement was in effect a twenty-year loan, and it was emphasized that there had been no agreement reached in the discussions between Mr. Bullitt and Mr. Litvinoff that the United States would extend the Soviet Government a twenty-year loan.

It was suggested to Ambassador Troyanovsky that as a temporary modus vivendi the Export-Import Bank might be willing to finance Soviet purchases in the United States on a basis similar to that upon which financial assistance is being extended in connection with exports to other countries, provided a certain additional charge were paid for such financing facilities. The proceeds from this charge would be deposited in the Treasury in a special fund for the future indemnification of American claimants against the Soviet Union. It was pointed out that there might not even need to be any written agreement with regard to this matter. The Department would have to announce, of course, that an additional charge was being made and indicate the disposition of the proceeds from this charge. In response to an inquiry, Mr. Troyanovsky said he did not think that Mr. Boiev would be willing to discuss this matter without special authority from Moscow. Mr. Moore stated that it would be best if [Page 190] Mr. Troyanovsky did not consult Moscow with reference to this question until Mr. Moore had had an opportunity to discuss the matter with higher authorities.

The question of the generalization of tariff reductions to the Soviet Union was also discussed.16 The present status of the matter was explained to the Ambassador. It was explained to him that the Government of the United States considered it necessary to be in a position to make some statement with regard to the specific increase in Soviet purchases in the United States which would result from the generalization of tariff reductions to the Soviet Union. He was told that Litvinoff said the Soviet Government could not agree to the inclusion of a specific figure ($30,000,000) in the exchange of notes. The United States was willing, however, to agree to its inclusion in a separate communication. Mr. Troyanovsky suggested the possibility of Boiev being authorized to send a note to the Department stating that Soviet purchases would amount to at least $30,000,000 in 1935.

Robert F. Kelley
  1. See pp. 192 ff.