Foreign Relations of the United States, 1946, Eastern Europe, The Soviet Union, Volume VI

861.24/2–446

Memorandum by Mr. Emilio G. Collado, Deputy on Financial Affairs to the Assistant Secretary of State for Economic Affairs⁹³

secret

[Washington,] February 4, 1946.

U.S.S.R. Economic Matters:

1. Lend-Lease Settlement—Inventory

2. Credit Negotiations—NAC Statement

1. Lend-Lease Settlement

A lend-lease pipeline arrangement of $400 million was entered into by General Rudenko for the Soviets and Mr. Crowley on October 15, 1945. On the same day Mr. Crowley sent General Rudenko a letter requesting an inventory of lend-lease goods in the hands of the U.S.S.R. on September 2, 1945. On January 4 Mr. Thorp sent a follow-up, and on January 22 General Rudenko replied that his Purchasing Commission was not competent in these matters.

There is attached a note⁹⁴ for the signature of the Secretary to the Soviet Embassy requesting an inventory of lend-lease goods for settlement purposes.

2. Credit Negotiations

There is attached a copy⁹⁴ of a full statement of U.S.-U.S.S.R. credit conversations. It will be noted that on August 28, 1945 General Rudenko in writing requested a credit of $1 billion at 2 3/8 percent interest.⁹⁵ Except for a telephone conversation with Durbrow (October 1945) in which Kapustin wished to know to whom he should speak about the loan and Stalin’s and Mikoyan’s discussion of the subject in interviews with members of the Colmer Committee (September 1945)⁹⁶ neither government agencies in Washington nor Ambassador Harriman, nor the Secretary of State during his attendance at the meetings of Foreign Ministers in London and Moscow were approached by the Russians on the subject of U.S. loans.

The Department’s view is that when credit discussions take place, they should involve a full discussion of all economic matters between the two governments, including economic problems relating to the Eastern European countries. A full documentation on economic matters affecting the U.S.S.R. was prepared for the Secretary in December.⁹⁷

The present problem is one of timing—in relation to the Soviets and in relation to British loan legislation.

The Department early in January notified Ambassador Harriman that it proposed to await a Soviet advance on credits as well as on joining the Bretton Woods⁹⁸ institutions. We have sent to the Soviets the same invitation to participate in the March 8 meeting of the Boards of Governors at Savannah that we have sent to other countries which were at Bretton Woods but failed to sign the Agreements.

We have no direct evidence regarding the Soviet failure to press for credits and to sign the Bretton Woods Agreements. It has been suggested that the Soviets believe the U.S. is going to have to press loans in order to support exports as a measure of preventing unemployment and depression, and that, following their interpretation of the British arrangements, we shall make a large credit on special terms in order to obtain Soviet participation in the Bretton Woods Agreements.

It would of course be difficult for the U.S. to extend a reconstruction loan to the U.S.S.R. if that nation fails to join the Bretton Woods institutions.

The pressing problem is how to handle possible credits to the Soviets in the British loan hearings in the Congress. The NAC is preparing a paper on overall loan program in reply to many questions which have been and will continue to be asked.

It is recommended that loans to the U.S.S.R. be handled in Congressional hearings as follows:

a. Last summer provision was made for possible credits of $1 billion to the U.S.S.R.

b. Last fall the Soviets requested such a credit but no discussions have taken place recently.

c. In making up the NAC forecast of possible Eximbank needs to take care of interim emergency reconstruction demands prior to the full operation of the International Bank, the figure of $1 billion for the U.S.S.R. has been retained.

d. If the U.S.S.R. requests aid beyond that which the Eximbank could extend, we shall refer them to the International Bank.

e. Whether or not the Eximbank will actually grant a loan to Russia will, of course, depend on a great number of factors. It would be premature, however, to discuss these factors now since they will be determined by the overall situation which will obtain at the time of the negotiations.

It is further recommended that the Department continue its position of a month ago which places the initiative for any further discussions upon the Soviets. It is of course possible that the sending of our note on lend-lease inventory and settlement to the Soviet Embassy, may precipitate loan and general economic negotiations.

93. Addressed to H. Freeman Matthews, Director of the Office of European Affairs; William L. Clayton, Assistant Secretary of State for Economic Affairs; and to the Under Secretary and the Secretary of State.
94. No attachments were found with this copy of the memorandum.
94. No attachments were found with this copy of the memorandum.
95. Foreign Relations, 1945, vol. v, p. 1034.
96. For comment on discussions with members of the House of Representatives Special Committee on Postwar Economic Policy and Planning, headed by Representative William M. Colmer, see telegram 3277, September 15, 1945, 2 p.m., from Moscow, Foreign Relations, 1945, vol. v, p. 881.
97. For portion of a report “The Soviet Union in 1945—An Economic Review” given to the Secretary of State on December 24, 1945, while in attendance at the Moscow meeting of Foreign Ministers, see Foreign Relations, 1945, vol. v, p. 993.
98. For documentation concerning the United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, July 1–22, 1944, see Foreign Relations, 1944, vol. ii, pp. 106 ff.