Memorandum by the Secretary of the Treasury (Morgenthau) to President Roosevelt

A $10 Billion Reconstruction Credit for the U.S.S.R.

I suggest consideration be given to a financial arrangement with the U.S.S.R. to provide her with $10 billion credits for the purchase of reconstruction goods in the U.S., with provision for repayment to us chiefly in strategic raw materials in short supply in the U.S.

The interest rate could be 2%, amortized over a period of 35 years. A schedule of repayments is attached.73
The Russians have more than adequate means to assure full repayment. There are three principal sources from which she can obtain the necessary amount of dollars.
Selling to us strategic raw materials which are in short supply in the U.S. because of our depleted natural resources. (See attached memorandum.)
Russia will be able to develop substantial dollar assets from tourist trade, exports of non-strategic items to the U.S., and from a favorable balance of trade with the rest of the world.
Russia has a stock of gold estimated at $2 billion now and is reported to be able to produce from $150 to $250 million per year. These gold resources can be used to pay her obligations to the United States to the extent that her other dollar sources are not adequate.
An important feature of this proposal is that we will be conserving our depleted natural resources by drawing on Russia’s huge reserves for current needs of industrial raw materials in short supply here. We would be able to obtain a provision in the financial agreement [Page 949]whereby we could call upon Russia for whatever raw materials we need without giving a commitment on our part to buy.
This credit to Russia would be a major step in your program to provide 60 million jobs in the post-war period.

Henry Morgenthau, Jr.
  1. The attachments to this document are printed in Accessibility of Strategic and Critical Materials to the United States in Time of War and for Our Expanding Economy, Senate Report No. 1627, 83d Cong., 2d sess., pp. 373–376.