861.24/1–1345
The Administrator of the Foreign Economic
Administration (Crowley) to the Secretary of State
Washington, January 13,
1945.
Dear Ed: Ambassador Harriman’s cables of
January 4, 1945, and January 6, 1945, 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.
I know that you appreciate the importance of having the President
informed of our united views on this subject.
Sincerely yours,
[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 Act77 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.
- 3)
- The proposed amendment to the Master Agreement offered the
Soviet Government some months ago78
provides the only method now
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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,79 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 semifinished 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.
