Foreign Relations of the United States Diplomatic Papers, 1941, General, The Soviet Union, Volume I

861.24/516½

Memorandum by Mr. Charles P. Curtis, Jr., Special Assistant to the Under Secretary of State (Welles)

[Washington,] June 30, 1941.

Memorandum on Organization and Policy for Export and Production of Articles for Russia

It is essential at the outset that one central organization be established to which the Russian Embassy or Amtorg must present all requests for material of every sort. In the past the Russians have approached several departments and agencies, which has resulted in considerable confusion. This should be eliminated. Similarly it is essential that the Russians shall present their requests through comprehensive lists rather than in isolated applications. Only in this way can a coherent policy be established and administered.

organization

It is therefore recommended that a special temporary committee be organized, composed of responsible officers of the Department of State, the Office of Defense Aid Reports, the Administrator of Export Control, OPACS,⁴ OPM,⁵ (to represent the Division of Purchases, Production, and Priorities), the Army and Navy Munitions Board, and when required the Maritime Commission. Other agencies will be called in from time to time as may be necessary.

The Chairman of the Committee should be Mr. Charles P. Curtis, Jr., Special Assistant to the Under Secretary. The Department of State will furnish the secretariat.

procedure

Different procedures should be established in dealing with (1) raw materials and civilian goods, and (2) air craft and other military equipment.

(1) Raw Materials and Civilian Goods. Here, as stated above, the Russian Embassy and/or Amtorg should present to the committee in the first instance lists of articles, specifying in each instance (1) whether the article is completed or is to be produced, and, if to be produced, (2) whether in process of manufacture, specifying the percentage of completion. The list should further contain (3) a description of the article, (4) the name of the supplier proposed, (5) the order number, (6) the date of desired delivery, (7) the cost, (8) the port of shipment, (9) the name of the ship (where known), (10) the date of expected sailing (where known), (11) the port of destination, (12) the purpose and use to which the article is to be put, and such other information as the committee may from time to time require. Such lists will be given to all members of the committee. The committee should hold regular meetings, daily if necessary, and thereafter at regular intervals. Decisions should be reached at these meetings and, thereafter, applications for export licenses and other documents should be filed as necessary. It seems most desirable that the Administrator of Export Control issue a directive to the Chief of the Division of Controls⁶ under which he will be authorized to issue immediately any license applied for if the proposed exportation has been approved by the committee. It should not be necessary for any agency represented on the committee to refer any matter to any other agency represented on the committee.

The policies applicable are those generally described below. The committee will be expected to recommend modifications of these policies in the light of their practical application.

(2) Aircraft and other military equipment. Applications for aircraft and military equipment will be referred by the committee to the Joint Aircraft Committee and the Division of Defense Aid Reports respectively.

policy

The requests to be submitted by the Russian Embassy shall be dealt with as follows:

(1) In the case of articles which have been ordered, are finished goods, and await only an export license and shipping to be exported, as is understood to be the case for the items in the first lists submitted, K, L, M, and N, without special reason to the contrary, a license is to be issued in each case on applications pending or to be filed.

(2) Requests for the approval of the delivery and export of articles which are finished or which, if still in the course of production, can be finished promptly, should be granted, and the necessary approvals given, unless the articles are immediately and urgently needed for the defense of this country or of a country which is actively resisting aggression and which this country is aiding in such resistance.

(3) Requests for the approval of the delivery and export of articles which are now in course of production shall be granted and the necessary approvals given, unless further production will take up production capacity immediately and urgently needed in the defense of this country or of a country which is actively resisting aggression and which this country is aiding in such resistance and the article, when finished, will not be of use in such defense, either because it is not of standard specification or otherwise.

(4) New orders and purchases are to be handled on the same basis as the orders and purchases referred to in Section III, with the recognition, however, of increased time during which production capacity will be occupied and increased uncertainty of the circumstances at the time of their delivery. These considerations, however, must be given less importance in cases in which the article, when completed, may be expected to be of use in the defense program of this country or of any country whose defense this Government is assisting.

(5) The purchase and export of standard commodities such as petroleum and petroleum products, animal and vegetable fats, leather, etc. are to be approved, but the quantities to be approved shall be considered in the light of existing or expected shortages of the commodities in this country.

(6) In every case the availability of shipping facilities must be considered.

(7) Russia is fighting against the same aggression against which we are helping other countries to fight and against which we are ourselves preparing. The determination of what military aid is to be given is not the function of this committee. The President will decide as between Russia’s needs for aircraft and for military equipment and such needs here and in those other countries. Russia’s other needs will be handled by this committee along the lines of policy stated here and in the statement of the Acting Secretary of State on June 24th.⁷ Wherever it is possible without immediate and grave prejudice to our own defense or economy or our aid to those other countries, Russia should be permitted to maintain and fortify her internal economy by purchases in this country. This committee and the procedure above set forth is established to expedite the handling of those purchases.⁸

4. Office of Price Administration and Civilian Supply.
5. Office of Production Management.
6. Joseph C. Green.
7. The statement made on June 23 is meant; see telegram No. 836, June 23, to the Ambassador in the Soviet Union, p. 767.
8. Mr. Welles wrote at the end of this memorandum, “Approved.”