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

861.24/1792a

The Department of State to the Embassy of the Soviet Union ⁸⁹

Washington, May 24, 1944

Aide-Mémoire

There is attached for the consideration of the Government of the Soviet Union the draft of a proposed agreement between the United States of America and the Union of Soviet Socialist Republics, supplementing the Preliminary Agreement of Mutual Aid between the two Governments, dated June 11, 1942.

The subject matter of the proposed agreement is a plan for the continuance of an uninterrupted flow of lend-lease supplies to the Soviet Union during hostilities against our common enemy and for the orderly liquidation of lend-lease supply arrangements upon the termination of hostilities. Pursuant to powers granted by laws of the United States, and particularly by Section 3(c) and other sections of the Act of March 11, 1941, as amended, an agreement between the two Governments is suggested embracing the following broad points:

1. It would be understood that transfers of supplies by the United States under the Third Protocol prior to a determination by the President that active military operations against the common enemy have ceased would be made on lend-lease terms, under the Agreement of June 11, 1942.

2. It would be agreed that certain supplies would be exported by the United States to the Soviet Union after that date, on certain terms of repayment. The categories of supplies and the terms of repayment applying to them would be agreed upon in a schedule to be attached to the agreement. Additional categories of supplies could be added from time to time by mutual agreement. It is contemplated that supplies in these categories would exclude those which it was mutually agreed were subject to the terms of paragraph three, but would include a large variety of industrial supplies, and other supplies of importance to the war production program of the Soviet Union, which had been contracted for by the United States, or were in inventory in the United States, in the course of the program of lend-lease aid to the Soviet Union, and had not been exported or otherwise transferred to the Soviet Union prior to the determination by the President that hostilities against the common enemy have ceased.

3. It would be agreed to establish a second class of supplies, to be transferred during the period of hostilities, and for the statutory period thereafter, on certain terms of repayment. The terms of repayment applying to such supplies would be agreed upon in a schedule to be attached to the Agreement, and the supplies involved would be agreed upon from time to time and inserted in this schedule. It is contemplated that this schedule would include certain supplies, required as part of the war production program of the Soviet Union, which take an unusually long time to produce, or reproduce if already constructed, and which have an unusually long period of expected usefulness. Payment on credit terms for such supplies is thought to be appropriate, Within the period allowed by statute, after the President’s determination that active military operations against the common enemy have ceased, the United States would undertake to deliver such of the undelivered supplies in this class as have been contracted for by the United States, or title to which is in the United States, prior to such a determination by the President.

4. The remaining clauses of the proposed Agreement consist of technical provisions allowing both contracting parties certain cancellation privileges, made desirable by the uncertain course of the war; and of provisions defining the relationship of the proposed Agreement to certain Articles of the existing Mutual Aid Agreement of June 11, 1942.

[Enclosure]

Agreement Supplementary to the Mutual Aid Agreement Between the Governments of the United States and the Union of Soviet Socialist Republics

[Here follows text of preamble of the agreement almost identical with paragraphs 1 and 2 of “Recitals” given in telegram 625–627, March 18, printed on page 1065.]

Article I. The Government of the United States, in a Protocol signed on October 19, 1943, by that Government and the Governments of the Union of Soviet Socialist Republics, the United Kingdom and Canada, undertook to make available under conditions stated in the Protocol certain war supplies for dispatch to the Government of the Union of Soviet Socialist Republics during the period from July 1, 1943, to June 30, 1944.

The Government of the United States agrees that transfers of supplies by the Government of the United States to the Government of the Union of Soviet Socialist Republics under the aforesaid Protocol prior to a determination by the President of the United States that active military operations against the common enemy have ceased, shall be made under the terms of the Mutual Aid Agreement of June 11, 1942. The provisions of this Article may be extended by mutual agreement to future protocols or agreements, subject to the other Articles of this Agreement.

Article II. Within such periods as may be authorized by law, the Government of the United States undertakes to transfer to the Government of the Union of Soviet Socialist Republics, after a determination by the President of the United States that active military operations against the common enemy have ceased, and the Government of the Union of Soviet Socialist Republics undertakes to accept, those supplies included in the categories set forth in Schedule I annexed to this Agreement which the Government of the United States shall have agreed to make available in order to provide war aid to the Government of the Union of Soviet Socialist Republics and, prior to said determination of the President, shall have contracted for or shall have in inventory, and which shall not have been exported or otherwise transferred to the Union of Soviet Socialist Republics prior to said determination.

The Government of the Union of Soviet Socialist Republics undertakes to pay the Government of the United States in dollars the cost of the supplies transferred under the provisions of this Article, and interest thereon, according to the terms and conditions set out in Schedule I annexed to this Agreement.

Additional categories may be added to the categories in Schedule I from time to time prior to said determination by the President by the mutual agreement of the parties. When so added, the financial arrangements set forth in Schedule I shall apply.

Article III. Within such periods as may be authorized by law, the Government of the United States undertakes to transfer to the Government of the Union of Soviet Socialist Republics, and the Government of the Union of Soviet Socialist Republics agrees to accept, those items of capital equipment needed in the Soviet Union’s programs of war production, requiring a long period to produce, or to reproduce if already constructed, and having a long period of useful life, which may by mutual agreement be included from time to time in Schedule II annexed to this Agreement and which the Government of the United States shall have contracted for or shall have title to prior to the determination by the President that active military operations against the common enemy have ceased.

The Government of the Union of Soviet Socialist Republics undertakes to pay the Government of the United States in dollars the cost of the supplies transferred under the provisions of this Article, and interest thereon, according to the terms and conditions set forth in Schedule II annexed to this Agreement.

[Here follows text of articles IV–VI, virtually identical with that given in telegram 625–627, March 18, printed on page 1065.]

Article VII. This Agreement shall take effect as from this day’s date. It shall continue in force until a date to be agreed upon by the two Governments.

Signed and sealed at Washington in duplicate this . . . . . day of April, 1944.
For the Government of the United States
For the Government of the Union of Soviet
Socialist Republics

[Subenclosure]

Schedule I

The terms and conditions on which the supplies in the categories listed below are to be transferred by the Government of the United States to the Government of the Union of Soviet Socialist Republics under Article II of this Agreement, are that the Soviet Government pay the Government of the United States the cost of such supplies, with interest on the unpaid balance thereof from the first day of the month following the month in which transfer took place, at the average rate of carrying costs on the public debt of the United States during the preceding calendar year, plus one-eighth of one percentum per annum. The Government of the Union of Soviet Socialist Republics shall be notified in December of each year of the rate applicable for the ensuing year. The rate applicable for the current year is two and one-tenth percentum. Interest shall be paid within twelve months from the first day of the month following the month in which transfer took place, and annually thereafter.

The first payment of five percentum of the principal due shall be made by the Government of the Union of Soviet Socialist Republics between the first day of the thirty-seventh month and the last day of the forty-eighth month following the month in which the transfer shall have been made, and payments in the same amount shall be made annually thereafter until the principal shall have been extinguished. If by reason of extraordinary and adverse economic conditions during the course of payment, the transfer of a due payment on principal would not be in the joint interest of the United States and the Union of Soviet Socialist Republics, further transfer of payment on principal may be postponed by agreement of both Governments for an agreed upon period.

The following categories of supplies are those referred to in Article II of this Agreement, and except as otherwise noted correspond to categories listed in “United States of America, Standard Commodity Classification, Volume I, United States Government Printing Office, Washington: 1943”. The supplies comprised in these categories shall not include any of the supplies referred to in Article III of this Agreement and listed by mutual agreement in Schedule II annexed to this Agreement.

U.S.A. Standard Commodity Classification Group Number		Commodity Description
01		Live animals
08		Metallic Ores, Concentrates and their Unrefined Metallic Products
09		Crude Non-Metallic Minerals, except Coal and Petroleum
19–100000 to 19–690000 incl. and 19–800000 to 19–999000 incl.		Chemicals except explosives
21		Iron and Iron and Steel Scrap
22		Steel
23		Ferro and Non-Ferrous Additive Alloys
24		Non-Ferrous Metals
25		Fabricated Metal Basic Products
26		Non-Metallic Mineral Basic Products—chiefly structural
27		Non-Metallic Mineral Basic Products—chiefly non-structural
29		Miscellaneous Basic Materials
31		General Purpose Industrial Machinery and Equipment
32		Electrical Machinery and Apparatus
33		Special Industry Machinery
34		Metalworking Machinery
35		Agricultural Machinery and Implements, except Tractors
36		Construction, Mining, Excavating and Related Machinery
37		Tractors
38		Office Machines
39		Miscellaneous Machinery
41		Communication Equipment and Electronic Devices
43–6000 to 43–9190 incl.		Marine Main Propulsion Machinery and Gears, Shafting and Ship Propellers, Steering Gears, and Miscellaneous Special Ship Equipment
44		Railroad Transportation Equipment
45–1000 to 45–2199 incl. 45–5000 to 45–9000 incl.		Motor Vehicles including Jeeps except Combat Vehicles and Ordnance Service and Repair Trucks and Trailers
49		Miscellaneous Transportation Equipment
51		Plumbing and Heating Equipment
52		Air Conditioning and Refrigeration Equipment
53		Lighting Fixtures
54		Furniture and Fixtures
55–1000 to 55–5900 incl. and 55–9000		Photographic Equipment (excludes Film and Paper)
56		Optical Instruments and Apparatus
57		Indicating, Recording, and Controlling Instruments and Accessories except Watches and Clocks
58–5000 to 58–9000 incl.		Professional and Scientific Instruments and Apparatus except Indicating, Recording and Controlling (excludes Dental, Medical, Surgical and Hospital Equipment)
59–1112 to 1229 incl.	}	Miscellaneous Equipment (excludes Military)
59–1232 to 1241 incl.
59–1243 to 1290 incl.
59–1300 to 1500 incl.
59–1700 to 9000 incl.
68		Footwear
69		Fabricated Textile Products except apparel
71		End Products of Leather except Apparel, Footwear and Luggage
72		Converted Paper Products and Pulp Goods
74–1000 to 5000 incl. 74–6700, 6910, 6920, 6960, and 6990		Rubber End Products, Natural and Synthetic, except Footwear and Clothing (excludes Medical and Hospital Goods)
75–1100 and 75–2000 to 9000 incl.		End Products of Metal Industries, except Machinery and Equipment and Hospital Utensils
76		Finished Wood Products except Furniture and Millwork
77		End Products of Glass, Clay and Stone
79–1000 to 3000 incl.	{	Miscellaneous End Products of Manufacturing Industries (excludes Surgical and Medical Supplies)
79–5000 to 9000 incl.

Schedule II

The terms and conditions on which the supplies listed below are to be transferred by the Government of the United States to the Government of the Union of Soviet Socialist Republics under Article III of this Agreement are the same as those set forth in Schedule I annexed to this Agreement, with the exception that in the case of supplies transferred prior to the determination by the President that active military operations against the common enemy have ceased, the date of transfer shall be deemed to be the date of the determination aforementioned.

89. Handed to Ambassador Gromyko on May 24. In telegram 1366, May 31, 1944, 2 p.m., the Department informed the Embassy in Moscow that the aide-mémoire and draft agreement had been handed to Ambassador Gromyko on May 24 and that Ambassador Harriman “saw and approved the final text while he was in Washington.” (861.24/1803a) The texts were sent to Moscow in instruction 179, June 8 (not printed).