861.51/8–2845
Memorandum by the Chairman of the Government Purchasing Commission of the Soviet Union in the U.S.A. (Rudenko) to the Foreign Economic Administrator (Crowley)96
In accordance with your offer concerning the purchase of the equipment and materials remaining in the United States after the termination of Lend-Lease and under outstanding Lend-Lease contracts the Government of the U.S.S.R. anxious to contribute in every possible way to the settlement of this problem agrees to obtain a credit for the procurement of the Lend-Lease materials and equipment remaining in the U.S. after the termination of Lend-Lease and under outstanding Lend-Lease contracts on the total amount of about 400 million dollars.
In addition to that in accordance with your offer our Government wants to obtain through the Export-Import Bank of Washington a credit of 1 billion dollars to finance new orders and the purchase of various kinds of goods.
Thus the total amount of the two credit arrangements approximates 1.400 million dollars.
I. We propose the following terms of the credit for the purchase of the Lend-Lease materials:
(1) The U.S.S.R. agrees to purchase such Lend-Lease equipment and materials as will be mentioned in our list on the amount of about 400 million dollars including locomotives, diesel-electric locomotives, [Page 1035] rails, pipes, spare parts for trucks, meat products, fats, breadstuff and industrial equipment. The complete list of these materials and equipment will be furnished by us within a few days.
(2) The period of the complete repayment of the credit is to be 30 years.
The following conditions of the repayment of the credit are suggested:
The repayment will start at the end of the 9th year and will proceed in the following manner:
Each year during the first four years
2,5% of the total amount of the credit will be repaid;
each year during the following four years
3,5% of the total amount of the credit will be repaid;
each year during the following four years
4,5% of the total amount of the credit will be repaid;
each year during the following four years
5,5% of the total amount of the credit will be repaid; and
each year during the last 6 years
6% of the total amount of the credit will be repaid.97
(3) The annual interest rate of the credit is to be 2⅜% of the used part of the credit not repaid at the time when the payment is made.98
(4) 10% of the price of the Governmental contracts with firms will be deducted.99
(5) The storage expenses incurred by the U.S. Government will be paid according to their actual cost and the transportation expenses will be paid according to the export rates.1
[Page 1036]II. General Rudenko would like you to instruct the F.E.A. to furnish us with complete information concerning the inventories of our orders.2
III. The following terms of a One Billion Dollar Credit which the Soviet Government wishes to obtain from the Export-Import Bank are proposed:
(1) The period of the complete repayment of the credit will be 30 years,
(2) The repayment will start at the end of the 9th year and will proceed in the following manner:
Each year during the first four years
2,5% of the total amount of the credit will be repaid; each year during the following four years
3,5% of the total amount of the credit will be repaid; each year during the following 4 years
4,5% of the total amount of the credit will be repaid; each year during the following 4 years
5,5% of the total amount of the credit will be repaid; each year during the last six years
6% of the total amount of the credit will be repaid.
(3) The annual interest rate of the credit is to be 2⅜% of the spent part of the credit not repaid at the time when the payment is made.3
- Marginal notation on the original: “Submitted by General Rudenko to Mr. Crowley at meeting on August 28, 1945.”↩
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On a retyped copy of this memorandum after this section the following passage has been interpolated:
↩“Comments on (2)
“Mr. Crowley stated that the FEA would try to work out these terms of amortization if this is possible without interference with negotiations with other countries on the disposition of lend-lease materials in inventory and under contract.”
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On a retyped copy of this memorandum after this section the following passage has been interpolated:
↩“Comments on (3)
“Mr. Crowley agreed to this rate of interest.”
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On a retyped copy of this memorandum after this section the following passage has been interpolated:
↩“Comments on (4)
“General Rudenko stated that manufacturers were offering the U.S.S.R. lower prices on new production than the Government contract price, that because of lower costs of production in the future manufacturers could sell at lower prices, and that in export trade it is customary for manufacturers to give discounts in prices.
“Mr. Crowley stated that the FEA could not agree to a 10 percent deduction in contract prices but that we would discuss the matter with the War Department and as soon as the amount of supplies which will be covered by the transaction is determined, we should have another meeting to discuss the prices at which the supplies will be transferred.”
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On a retyped copy of this memorandum after this section the following passage has been interpolated:
↩“Comments on (5)
“Mr. Crowley said that the FEA would agree provided that it was administratively feasible to determine actual storage and transportation expenses.”
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On a retyped copy of this memorandum after this section the following passage has been interpolated:
↩“Comments on II
“General Wesson stated that the FEA had already begun work with the Treasury on such an inventory but that a complete and detailed study would take several weeks.
“It was agreed that General Rudenko would submit a list of the materials and equipment which the U.S.S.R. agrees to purchase and that the commodity representatives of the U.S. and U.S.S.R. would proceed immediately with discussions to determine the amount of supplies available in each category in the list.”
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On a retyped copy of this memorandum after this section the following passage has been interpolated:
↩“Comments on III
“Mr. Crowley stated that he would recommend to the Board of the Export-Import Bank the proposed 30 year period and terms of amortization. He said that he could not agree to a rate of interest of 2⅜ percent but that he would recommend to the Board a rate of 3 percent. Mr. Crowley pointed out that the rate of interest on loans by the Export-Import Bank must be uniform for the various countries but that terms of amortization should be worked out in such a manner as not to embarrass the U.S.S.R. in the repayment of the loan and in the reconstruction of their country.”