Foreign Relations of the United States: Diplomatic Papers, 1944, Europe, Volume IV

The Ambassador in the Soviet Union (Harriman) to the Chairman of the President’s Soviet Protocol Committee (Hopkins)³⁸

Moscow, 9 February 1944.

Referring to your long cable³⁹ regarding Russian Protocol and reconstruction program I heartily endorse the general principles you outline but urge that you reconsider certain specific parts of your suggested program.

(1) I see no need for a supplementary agreement to the Third Protocol. I believe it will be time enough to incorporate the suggested new principles into the Fourth Protocol which should of course cover the material and equipment placed into production under the Third Protocol but shipped after June 30, 1944. I am not concerned over any shipments made prior to June 30. I am satisfied that the course of events will justify Third Protocol shipments under existing terms and I believe it would be most unfortunate if we should attempt to negotiate a supplement to the Third Protocol at this time. I feel it will be misunderstood and might seriously complicate our relations in other directions. I am cabling you⁴⁰ for your personal information more fully about this aspect.

(2) We have not been in a position to obtain evidence so far of any accumulation of excessive stocks except as we have specifically reported. On the other hand we do know that it takes many months before material shipped from the United States can be put into use by the factory or consumer. It is the volume of this pipeline which may well exist up to the termination of hostilities that causes me concern and should be given consideration in connection with the Fourth Protocol. I therefore recommend that you do not limit your proposal that the Soviet Government reimburse us for the shipments subsequent to cessation of hostilities against the common enemy but include at least some items that have been shipped for a period prior thereto of from 3 to 6 months depending on the item and perhaps longer for plant equipment of dual value. Offhand I would exclude food but would include items having use for reconstruction such as those you have mentioned and also particularly machinery, equipment for plants and machine tools. These should as you suggest be applied against a reimbursement credit arranged under Lend Lease.

(3) I don’t understand why we should be committed to ship munitions after the termination of hostilities unless the Soviets are prepared to pay for them. I agree that the Soviet Government should be committed to buy from US under the credit you propose other supplies and equipment that are in production which have a post war use.

(4) I agree with your proposal for accepting requests under the Fourth Protocol for items which have the dual purpose and including a provision in the Protocol for reimbursement over a period of years for the unshipped items as well as those shipped as defined above. I believe it is in our interest however to begin to work at once with the Soviet Union on their reconstruction program as a whole including those items for plant equipment which cannot be reasonably justified for war use on account of length of time required before any substantial production can be obtained therefrom. I agree that your proposal will take care of some of the needed items. On the other hand it will take a long time to make plans and develop detailed designs which if done now would give immediate business to our factories and employment to our labor when hostilities cease or even before. If we don’t become involved now in discussions with the Soviets over this program and obtain an understanding of it we will lose a competitive advantage to which we are entitled and information of value in other directions. In addition the Soviets place great importance on knowing now our general attitude toward their reconstruction problems and if we push aside the consideration of their whole program doubts may be aroused as to our serious intents. Mikoyan has indicated a desire to work with us along these lines and although the terms of the credit he suggests would not be to my view acceptable particularly as to the interest rate I believe we should attempt to agree upon a credit for reconstruction now in so far as and in such amounts as we legally can. A reconstruction credit if extended now would allow us to join with them in planning for the larger program. Perhaps you can find a way to carry this on under the Lend Lease reimbursement credit or perhaps it might require an additional credit from the Export Import Bank. I am in no position to judge and will appreciate enlightenment. If we work with the Soviets on their entire reconstruction program it should not be difficult to arrive at decisions item by item as to what we are ready to accept under Lend Lease because of its dual purpose character and what items should be allocated in the first instance to the reconstruction credit. I therefore recommend that a credit be negotiated now available for procurement by the Soviets if items for reconstruction which we do not believe will be finished in time to be of real value for the war. As to the time when we shall put any of these items into production we should suit our convenience.

(5) I recognize that the details of any program will have to be worked out in Washington but whatever program is agreed to should I believe be at least cabled me prior to any discussions with the Soviet Missions in Washington for my final recommendations to you and in order that I will be in a position to discuss and explain our objectives to Mikoyan personally. I believe you will wish continually to get advice from me and the Supply Mission as to our reaction to the program as a whole and individual items on which our advice may be useful.

(6) In direct reply to your three questions my answer to Number 1 is Yes as qualified above. I have already partially answered question Number 2 in so far as I now have information by suggesting provision in the Fourth Protocol for reimbursement of certain materials shipped prior to the termination of hostilities. Members of the Military Mission and I expect to make extensive trips in the Soviet Union and we may have further impressions and information at a later date. It is my feeling that the general provision of Lend Lease which allows repossession by the United States of unconsumed Lend Lease supplies would protect us if we should find a situation sufficiently serious to call for action. Also it is my belief that any overstocking of particular items can be adjusted by reduced shipments during the Fourth Protocol. It might be desirable to include in the Fourth Protocol a general provision for downward revision of any item if events prove the item is not needed. As to question Number 3, I don’t believe that the proposed arrangements would require a substantial enlargement of the Supply Mission. [Here follows a brief section on administrative matters.] As much of what I say is of interest to Stettinius and the Dept of State if consistent [convenient?] will you show this cable to them.

[

Harriman

]

38. Copy of telegram obtained from the Franklin D. Roosevelt Library, Hyde Park, N. Y.
39. Dated 4 February, p. 1043.
40. Infra.