The Acting Secretary of State to the Ambassador in the Soviet Union (Harriman)
173. Everyone here—State, Treasury, and FEA—is agreed that the matter of aid to the U.S.S.R. in acquiring industrial equipment of war significance (that involved in the proposed 3–C agreement) must be separated from true post-war reconstruction credits (your telegrams 29 and 61). Separate telegrams will be sent to you regarding our reply to Ambassador Gromyko’s note of January 4, indicating that we will proceed with the Fourth Protocol; and instructing you to reply to Molotov’s aide-mémoire with special reference to the 3–C agreement. The present message is to provide you with background information regarding Washington views on post-war credit possibilities.
A study prepared in the Department which will be sent to you for comment highlights the following points in Russia’s interest in foreign credits:
[Here follow subparagraphs (a) through (f) as given in paragraph 5 of memorandum dated January 4 by Mr. Collado, printed on page 938.]
The Treasury has suggested a $10 billion credit at 2 percent, 35 years, coupled with an option for United States purchases at reasonable world prices of petroleum and minerals from the Soviets over a like period.
Preliminary views of the Department are that such a proposal can of course be made only after Congressional action of some sort; that it would be preferable to obtain blanket loan authority rather than seek specific loan authorization for the U.S.S.R. or any particular nation; that the rate of interest entails many complications in our relations with other countries, with general Export-Import Bank operations, with proposed transactions of the Bretton Woods bank, and with private investment; that from a tactical point of view it would seem harmful at this time to offer such a large credit and lose what little bargaining exists in future credit extensions; and that the suggested commodity arrangement would probably not be as strong an argument with the Congress as the Treasury believes, would arouse the opposition of petroleum and mineral interests, would not provide a fully distinctive basis for offering special credit terms to the U.S.S.R., and might raise questions of general commercial and commodity policy.[Page 968]
The general matter of credits to Russia has been discussed with the President who has displayed a keen interest and believes that it should not be pressed further pending actual discussions between himself and Marshal Stalin and other Soviet officials. Meanwhile the Department would appreciate your further comments on the Soviet proposal and your views on the Treasury suggestion.