Office of the Historian

861.51/3020: Telegram

The Ambassador in the Soviet Union (Harriman) to the Secretary of State

Moscow, January 9, 1944—1 p.m.
[Received 8:40 p.m.]

68. For the Secretary, the Under Secretary and Hopkins: Supplementing my No. 56 and No. 67, January 7 and 9, although I have not sufficient information to make definite recommendation I outline below for your consideration general terms under which a credit for reconstruction might be offered to the Soviet Government:

1.
The amount of the credit might be initially possibly 500 million dollars repayable over 25 to 30 years in annual installments beginning perhaps five years after termination of hostilities. The interest rate might be between 2 and 3 percent on net amounts drawn. I suggest a gold clause be incorporated to protect against possible future devaluation of the dollar. The credit might be granted under existing authority as a cash reimbursement credit under lend-lease or by the Export-Import Bank.
2.
Use of the credit should be limited to payment for manufacture[d], semi-manufactured, and raw products and services obtained from the United States. Although purchases during the war should [Page 1037] be made through a U. S. A. Government agency, the Soviet Purchasing Agency might later be allowed to negotiate with commercial firms direct. In any event no purchases under the credit should be made without the approval of a designated [government agency].
This agency in exercising its responsibility for approval, should give consideration to the desirability of the order from the standpoint of our own or peace-time economy and any other factors in which American interests are involved. During the war period at least, the Soviet Government should be required to give reasonable information as to the need for the items requested. We should maintain a small staff in Moscow to advise and make recommendations to this agency.
[3.]
As a matter of general policy, the United States Government should retain control at all times of the unallocated balance of the credit and there should be no implied or actual commitment to accept orders if for any reason it is considered inadvisable to do so. Although I do not wish to suggest entering this transaction in atmosphere of suspicion, there are many undetermined questions in our relations with the Soviet Union and we should not, therefore, put ourselves in position where this credit could be used for purposes incompatible with United States interest or unless our relations are developing satisfactorily in other directions.
4.
Before the first credit or additional credits are fully expended, consideration should be given to the extension of a new credit by the Government, unless at that time the Soviet Government can obtain credits through normal channels.

I would appreciate receiving your reactions to the above.

Harriman