861.51/3049
Memorandum by the Associate Chief of the Division of Financial and Monetary Affairs (Phelps) to the Chief of the Division (Collado)
Ambassador Harriman, in general, approved the course which is being followed in relation to proposed Lend-Lease settlements with Russia. It was stated that an attempt is being made to determine the magnitude of the installations for which payment may be requested. This information will probably be available within the next six weeks or two months. Ambassador Harriman stated that in his opinion the magnitude would be so great that payment would interfere with the ordinary development of trade and, therefore, that the settlements should be very generous. He thought that every attempt should be made to avoid long negotiations in relation to Lend-Lease and that the terms should be just as definite as possible. Perhaps some arrangement should be made whereby only installations which had been made from importations after a given date should be considered for settlement. He evidently was willing to press for Lend-Lease settlements quickly but saw no reason for rushing matters if they were not to be considered in the fourth protocol now under discussion. The question was raised as to securing material for rehabilitation under Lend-Lease. Ambassador Harriman stated that he had noted to Mr. Mikoyan that this was the only manner at present in which materials for installations could be secured in as much as no funds were available from the Export-Import Bank and direct loans were forbidden under the Johnson Act. He said that he hoped the Department would do everything possible to press for additional funds for the Export-Import Bank and for repeal of the Johnson [Page 1084] Act. It was noted by Mr. Bohlen that General Electric was thinking in terms of 8½ percent on the loan needed for procurement of equipment for the Dnieper Dam. He is following the policy of stating to representatives of concerns interested in furnishing equipment to Russia that although the Department has no policy objections to negotiations, nevertheless, it would like to be informed in advance of any actual contracts for materials and equipment. He recognizes the fact that there is no legal basis for obtaining such information. He said that representatives of various companies with whom he had spoken were very willing to provide such information to the Department.