861.51/3025: Telegram

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

334. For the Secretary and the Under Secretary. Supplementing my telegram 253, January 26 and previous cables. Mr. Mikoyan asked me to call on him this afternoon to discuss further the question of a credit for reconstruction. Mikoyan outlined his ideas of the terms of an original credit to be used for purchases in the United States when they can be made available, as follows:

As a first credit he suggests one billion dollars.
Credit to run an average of 25 years, repayment beginning in the 16th year in equal annual installments until the 35th year.
Interest one half of one percent. I explained that I had no instructions and that I could not comment on the amount. I pointed out that if the amount of the initial credit was a smaller figure, it could be expanded as occasion required. He said he had picked one [Page 1042] billion dollars as he was developing plans based on that figure and would like to submit it as a program. He could not yet tell me the general categories of supplies required but stated that they had already submitted requests for equipment for plants totaling 500 million dollars of which he thought 300 million dollars was definitely for war purposes and could properly be applied under lend-lease but he recognized that perhaps 200 million of this equipment should more appropriately apply against a credit. I explained carefully again that no orders for reconstruction could be taken which would interfere in any way with our own war effort.

As to repayment, I told him I thought that we might expect repayment to begin earlier. He explained that he had mentioned repayment to begin in the 16th year because the reconstruction of their economy would not be sufficiently advanced to allow them to safely undertake to begin repayments earlier and take care of their current requirements, and that their reconstruction plans were being based on a 15 year program and that after that they were certain they could meet repayment obligations.

As to interest, I told him that his suggestion of one half of one percent was too low. I pointed out to him that the United States Government itself paid more for its long-term borrowings. He commented that he considered that the use to which the credit would be put made the suggestion admissible.

He pointed out that he had been asked to have his requests for the Fourth Protocol32 submitted by March 1 and as some of these requirements undoubtedly will be for reconstruction he feels that it is desirable to come to some arrangement shortly in regard to the credit.

I agreed to cable you his suggestions and to request instructions.

  1. The Fourth (Ottawa) Protocol, covering the period from July 1, 1944, to June 30, 1945, was signed only on April 17, 1945, by the United States, the United Kingdom, Canada, and the Soviet Union. The text is printed in Department of State, Soviet Supply Protocols, pp. 89–156. The announcement of the signature made in Ottawa on April 20, 1945, is printed in Department of State Bulletin, April 22, 1945, p. 723.