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

861.24/6–1245

Memorandum by the Foreign Economic Administrator (Crowley) to the Secretary of State

Washington, June 12, 1945.

Subject: U.S.S.R. Request for Supplies for the Period July 1, 1945 Through December 31, 1945 Submitted to State Department May 30, 1945⁷⁸

1. As a result of my review of the items in this request, which it is my responsibility as Foreign Economic Administrator to determine whether or not they should be furnished with Lend-Lease funds, the following answer should be made to the Soviet Ambassador.

2. As regards the program of October 17⁷⁹ (Annex III of the Fourth Protocol) every effort is being made to supply the materials included in this program. As regards materials and equipment requested under the Fourth Protocol for the Arctic Region, Aviatrassa, Dalstroi, Narkomribprom, Sakhalin, Petropavlovsk and Soviet Harbor, these are being delivered within the limits of availability. For the Norilstroy program, only the food and petroleum products requested are being made available.

3. As regards the Soviet request for delivery during the period July 1–December 31 of equipment ordered under the Fourth Protocol but not shipped as of July 1, 1945 (estimated value $300,000,000), and in addition $98,000,000 of new orders, it is desired to point out that by July 1, 1945 the U.S. will have shipped to the U.S.S.R. under the several Protocols over $1,000,000,000 worth of machinery and equipment. This is made up of power, electrical and metallurgical equipment, machine tools ($375,000,000), construction equipment, general and special purpose equipment of various kinds and several plants of large capacity such as tire making, rolling mills, chemical plants and oil refinery plants. With few exceptions, everything asked for by the U.S.S.R. that could be fabricated, shipped and brought into production in a reasonable time was made available. The various programs which made up this equipment were approved by the U.S. when the war situation was still critical and its delivery to the U.S.S.R. has no doubt been a large factor in attaining the large production of munitions which the U.S.S.R. was able to deliver to the Red Army and Air Forces in the extensive military operations which brought Germany to her knees. With the defeat of Germany these production facilities must be many times more than adequate to meet any demands now foreseen. A continuation of the supply of equipment in quantity is not considered essential to Soviet military requirements and would serve in general only for rehabilitation of Soviet industry and would be contrary to the spirit of the Lend-Lease Act under which aid to Russia has and is now being given.

4. In view of this, equipment in excess of that necessary to meet the several programs specified in the second paragraph, which include items of machinery and equipment of over $50,000,000 exclusive of transportation equipment, will not be furnished on lend-lease terms unless in specific cases satisfactory explanation of its need in support of operations in Siberia is furnished.

5. The United States is prepared, however, to transfer to the U.S.S.R. under the terms set forth in the letter of May 30, 1945 from the Foreign Economic Administrator to the Soviet Purchasing Commission, such of this equipment as the U.S.S.R. desires to purchase and as can be offered by the United States in the light of competing demands and availability.

6. The U.S. feels that it can no longer make the expenditures necessary to continue to produce or hold this equipment in the absence of an undertaking by the Soviet Government to purchase it. Accordingly we have found it necessary to take steps to protect the interests of the United States through the initiation of procedures for diversion of the equipment to other requirements and for cancellation in cases where no requirement exists or no production has begun. Since these plans are well under way, it is urgent that requests to purchase any of this equipment be received promptly.

7. As regards undelivered plants the Foreign Economic Administrator has written to the Chairman of the Government Purchasing Commission of the Soviet Union in the U.S.A. asking to be advised whether the Soviet Government agrees that further deliveries of certain plants, on which proportionately small shipments have been made, will be upon cash payment by the Soviet Government of the total cost of the plants including the cost of any licenses under applicable patents. A prompt reply should be made to this letter in order that this matter may be settled.

8. As regards the raw materials, petroleum products, chemical products, rubber products, foodstuffs and miscellaneous materials requested, I am prepared to support the items listed in Cable M–24602 of 8 June 1945 to the War Department from the U.S. Military Mission in Moscow.⁸⁰ I assume that the advice as to the quantities which will be approved will be sent the Russians after the Protocol Committee has determined their availability.

78. See footnote 54, p. 1003.
79. See footnote 59, p. 942.
80. Not found in Department files, but see telegram M 24603, 8 June, from Moscow, p. 1012.