The Special Assistant to the Secretary of State (Bullitt) to President Roosevelt 31

My Dear Mr. President: Litvinov and I continued to argue for two hours on the subject of debts and claims. I finally managed to shake him a bit by telling him that the Johnson Bill,32 forbidding loans to countries in default on their indebtedness to the Government of the [Page 803] United States, was certain to be passed in January and that if the Soviet Government should make any absurd offer of settlement such an offer would surely be turned down by Congress and the Soviet Government would be unable to obtain one penny of credit from either the Government or any private corporation or individual in the United States, or their agencies abroad.

I urged Litvinov not to fix the lower figure at $50,000,000, as his Government would surely insist that that should be accepted as the maximum figure once the sum had been stated. He finally asked, “What sum would you consider might be acceptable to Congress?” and added “You will, of course, say $150,000,000.” I replied, “No, I will say nothing. I cannot predict what Congress will do, but the President can predict very exactly what Congress will do, and you should address that question to him.”

Litvinov proposes to ask you that question when you meet at 2 o’clock.

Litvinov added that he would say to you that he had entire confidence in your fair-mindedness, and he was sure that when you looked at the facts about our loan to the Kerensky33 Government and found that the money had been spent for the most part by Bakhmetieff buying supplies for Kolchack’s army, you would agree that the Soviet Government should not be obliged to assume liability for money used by its enemies.

The fact is that two-thirds of this Kerensky loan was telegraphed at once to Kerensky’s Government and used fighting the Germans.

Litvinov added that the private claims had been so padded that $50,000,000 he considered would be a fair settlement of all claims and debts. This is, of course, absurd, and I think you should endeavor forcibly to get him to fix at least $100,000,000 as the lower limit.

I am delighted that you have appointed Henry Morgenthau34 Acting Secretary of the Treasury, and I suggest that you might invite him to come in at two o’clock, since he will have to handle future negotiations on this matter.

I shall stop at your office at ten minutes before two, in case you should wish to draw up a final plan of campaign.

Yours devotedly,

William C. Bullitt

P. S. I think we were a bit too gentle with him this morning. W. C. B.

  1. Photostatic copy obtained from the Franklin D. Roosevelt Library, Hyde Park, N. Y.
  2. Approved April 13, 1934; 48 Stat. 574.
  3. Alexander F. Kerensky, Minister of Justice in the Russian provisional government, March–May, 1917, Minister of War, May–September, and Prime Minister, July–November, immediately preceding the Bolshevik Revolution of November 1917.
  4. Henry Morgenthau, Jr., governor of the Farm Credit Administration, May 27–November 16, 1933; he became Acting and Under Secretary of the Treasury on November 17.