861.24/1–1946
Memorandum by the Chief of the Division of Eastern European Affairs ( Durbrow ) to the Under Secretary of State ( Acheson )
Mr. Acheson: While I understand from Mr. Collado84 that you indicated your desire for a reply to the Secretary along the lines of the attached draft telegram,85 I believe that I must indicate to you the reasons why EE considers that it would be inadvisable from a long-range point of view to grant an unconditional credit of $100,000,000. to the Soviet Government for the purchase of surplus property. We realize, of course, that it is in the short-range interests of the United States Government to get rid of as much surplus property as possible.
Despite our many protests and requests for coordinated action regarding [Page 821] the economic blackout in Eastern Europe and other related questions, the Soviet Government has consistently refused to accept any of our views on this point. It has been our firm feeling that the only real lever we had to bring about any semblance of economic and political stability in Eastern Europe was through the withholding of credits. We have already weakened our bargaining position on this score by granting them approximately $400,000,000. of materials under the 3(c) agreement and over $250,000,000. of UNRRA benefits, a large proportion of which is to be given in agricultural and industrial equipment. While it was perhaps in our interest to give these two amounts, if we now add to it another $100,000,000. in surplus property, the amount of goods which we are making available to the Soviet Union will come not far below the original credit envisaged of $1,000,000,000.
If the Soviet authorities realize that by getting us to grant them credits on a piecemeal basis they can fulfill a substantial part of their needs, it immediately gives them the idea that the stands we have taken with regard to the economic blackout in Eastern Europe and any attempts to tie strings to Export-Import Bank credits which we grant them do not represent our firm position and that we are willing to compromise on these matters without attaining our announced aims. In this connection I suggest that you read the marked passages in the attached memorandum86 which contains significant points from Moscow relevant to this question.
It may be stated in this connection that Soviet and Soviet-inspired propaganda is now taking a strong line to the effect that in the not distant future the United States will suffer a crisis of overproduction which will oblige it to seek markets everywhere in the world, and that the Soviet Government therefore can afford to play a waiting game with respect to its desire for credits from the United States.
We therefore feel that in general the position taken by Mr. Harriman in his attached telegram No. 184, January 19,87 indicates the best long-range policy to attain our announced and desired aims.