861.24/1–1345
The Administrator of the Foreign Economic
Administration (Crowley) to
the Secretary of State
secret
Washington, January 13,
1945.
Dear Ed: Ambassador Harriman’s cables of January 4,
19451 and
January 6, 1945,2 concerning
Molotov’s proposal for a
long-term credit arrangement with the Soviet Union raise a number of
questions which may be discussed with the President at the
forthcoming conference.
These questions are so important I would like to suggest that you and
I speak with the President about them for a few minutes.
I am enclosing a rough draft of the points which we would like to see
made in the reply of this Government to Molotov’s proposal and Ambassador Gromyko’s note of January 4,
1945.3
I know that you appreciate the importance of having the President
informed of our united views on this subject.
Sincerely yours,
Leo T. Crowley
Administrator
[Enclosure]
Draft Reply to Molotov’s Proposal for Long-Term Credit
Arrangements with the Soviet Union and Ambassador Gromyko’s Note on the
Fourth Protocol
1) Projects financed under the Lend-Lease Act are part of this
Government’s war supply program. They must be segregated and
processed entirely apart from projects which may be financed
under long-term credits for postwar requirements.
2). With regard to the question of long-term credits for postwar
projects, this Government is now making a study as to the ways
and means of accomplishing this. However, it will require some
time to effect the necessary legislative enactments and a
determination of the amounts that may be available for this
purpose. These are conditions precedent to the formalization of
a definite agreement. This Government feels that such long-term
credits will be an important element in the development of
postwar relations between the two countries and is pleased to
receive from the Soviet Union at this time as much information
as possible as to the magnitude and scope of Soviet requirements
and terms of repayment the Soviet Government is prepared to
offer.
[Page 317]
3) The proposed amendment to the Master Agreement offered the
Soviet Government some months ago provides the only method now
possible for this Government to render greater aid to the Soviet
Union than is being currently rendered under Protocol
arrangements.
4) Within the authority contained in the Lend-Lease Act and
taking into account the amount of lend-lease funds available at
that time, this Government offered in the proposed amendment the
maximum program of projects which could then be undertaken to
meet the requirements of the Soviet Government. The terms of
credit, the price of the goods and other conditions set forth in
the amendment were arrived at after giving due consideration to
the views of the Soviet representative, Mr. Stepanov, who registered his
non-concurrence. On more than one occasion it was indicated to
Mr. Stepanov that the
terms offered were final.
5) This Government does not understand Ambassador Gromyko’s request that we
should put into production industrial equipment which the Soviet
Government agrees to pay for under terms of long-term credit,
inasmuch as no agreement has been reached with the Soviet
Government with respect to the terms of the lend-lease credit
offered in the amendment to the Master Agreement. It has been
and is the position which this Government must necessarily take
that before any further long-range industrial equipment can be
put into production under the Lend-Lease Act, agreement must be
reached on the terms of the credit proposed in the
amendment.
6) Much time has elapsed since the amendment to the Master
Agreement was offered to the Soviet Government. Since then, the
increased tempo in the war both in Europe and the Pacific has
brought about greatly increased demands on the internal economy
of this country in the categories of manpower, production
facilities and raw materials. The diversion of these to the
production of capital goods and semi-finished products to meet
Allied requirements has become increasingly difficult.
7) To guide our future approach to these problems we should
receive without further delay a definite indication from the
Soviet Government as to its acceptance or rejection of the
proposed amendment to the Master Agreement. The answer will have
a definite bearing on the extent of Soviet requirements it will
be possible to include in the war production program for the
next fiscal year and on estimates of the required funds now
being prepared for early submission to the Congress.
