Foreign Relations of the United States: Diplomatic Papers, 1945, Europe, Volume V

811.516 Export-Import Bank/4–1945

Memorandum by the Director of the Office of Financial and Development Policy (Collado)⁴⁵

[Washington,] April 19, 1945.

Subject: Long-term Reconstruction Credits to the U.S.S.R.

1. Attention is called to the Treasury proposal of a $10 billion long-term reconstruction credit to the U.S.S.R., the Russian request for a $6 billion credit, and the views expressed at length on these developments by Mr. Harriman in a recent cable (Moscow 1127, April 11, 1945).

2. With respect to the question of long-term postwar credits to Russia, OFD recommends as follows:

a. Legislative arrangements should be made to put the Export-Import Bank in a position to begin negotiations with the Russians—shortly after the conclusion of the San Francisco conference, if political conditions are favorable—on a $1 billion long-term reconstruction credit. (A separate memorandum makes recommendations regarding Export-Import Bank legislation and organization.)

b. The special rate of interest which the Russians have requested, 2¼ percent, should not be granted. The rate should be fixed to take into account the rates charged by the Export-Import Bank on other long-term loans and also the rates which the Bretton Woods Bank is likely to charge.

c. Control might be exercised to assure that the funds lent the Russians were expended on U.S. reconstruction goods, but the detailed checks which the Export-Import Bank usually exercises over expenditures of loans would be impractical to try to enforce. Russia’s gold stocks and production provide adequate assurance that she will be able to service the loan.

d. Arrangements for U.S. purchases of strategic materials from the U.S.S.R. should not be made a part of the loan contract; at least, difficulties which might arise in the way of completing such arrangements should not be allowed to stand in the way of the granting of the credit.

e. Consideration should be given to the advisability of extending future additional long-term credits to the U.S.S.R. in part at least through the Bretton Woods Bank, rather than entirely through the Export-Import Bank.

45. Addressed to the Secretary of State and the Assistant Secretary of State (Clayton); the latter noted: “I agree. W.L.C. 4/19/45.” In a covering memorandum of the same date Mr. Collado expressed the opinion that the recommendations “should obviously be discussed with Ambassador Harriman who, I am informed, has just arrived.” On April 20 the Secretary of State asked the Under Secretary, Mr. Grew, to handle the matter discussed in the memorandum and to let him know if there was anything he should discuss with Mr. Molotov, who was attending the United Nations Conference on International Organization, San Francisco, April 25–June 26, 1945. No record has been found of further conversation on this subject at this time or at the Conference.