800.51W89 U.S.S.R./48: Telegram
The Secretary of State to the Ambassador in the Soviet Union (Bullitt)
Washington, May 11,
1934—6 p.m.
72. Your 79 May 9, 9 p.m. Troyanovsky’s report to Litvinoff of conversation as detailed to you by the latter is most inaccurate.
Reiterate objection to a straight loan or a straight uncontrolled credit and try to work out agreement as follows:
- 1.
- Adhere to view that total debt payment of $150,000,000 is reasonable, particularly in consideration of devaluation of the dollar. Perhaps, if this found impossible, you can reach agreement on 125,000,000. Advise that you do not approve 100,000,000 in advance of communicating with Department. There should be stipulation for complete payment within say 20 years at a fair rate of interest.
- 2.
- Unless conditions in the Soviet Union are radically changed, as, for example, by the Government becoming unstable or war occurring, the Export-Import Bank will support specific trade transaction within that period to the extent of not less than twice the amount of the agreed indebtedness. But it should be stipulated that each transaction shall be liquidated in not more than 5 years as this would have the effect of creating a revolving fund that would place the Bank in position to more actively engage in transactions probably totaling several times amount of debt. It should, of course, be expressed that there is to be such discretion reserved the Bank as will avoid its liability to support trade transactions to the maximum extent at once. The bank credits should bear a normal rate of interest plus a rate to be applied on the debt.
- 3.
- Waive at your discretion requirement that the bank should receive a statement of trade transactions conducted independently of the bank with right to charge and receive additional interest thereon as concerns individual transactions not over $100,000.
- 4.
- The Bank will make advances only to American exporters. The Bank is prepared to discount Amtorg acceptances received by exporters in connection with specific transactions approved by the Bank for that part of the credit which the exporter would not be expected to carry. The maturities of such acceptances would vary according to different categories of goods with final maturity in no case exceeding 5 years.
For many reasons anxious as far as possible to avoid delay.
President has seen this.
Hull