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

861.51/3–1546

The Secretary of State to the Chargé of the Soviet Union ( Novikov )

Washington , April 18, 1946.

Sir: In reference to your note of March 15, 1946 the Government of the United States is pleased to learn that the Government of the Union of Soviet Socialist Republics is prepared to discuss with the Government of the United States all the economic questions specified in this Government’s note of February 21, 1946, and in particular to discuss at once the following questions:

(1) The request of the Government of the Union of Soviet Socialist Republics for a credit of one billion dollars.

(2) Preliminary discussions of a comprehensive treaty of friendship, commerce, and navigation between the United States and the Union of Soviet Socialist Republics and agreement to enter into negotiations in the near future for the conclusion of such a treaty.

(3) Methods for giving effect to the terms of Article VII of the Soviet Master Lend-Lease Agreement of June 11, 1942, such as are suggested in this Government’s “Proposals for Expansion of World Trade and Employment,” which were transmitted to the Government of the Union of Soviet Socialist Republics on December 21, 1945.

(4) General settlement of lend-lease obligations in accordance with the provisions of the Soviet Master Lend-Lease Agreement, concluded on June 11, 1942 between the Governments of the United States and the Union of Soviet Socialist Republics, on the basis of an inventory of lend-lease supplies in the possession of the Union of Soviet Socialist Republics or subject to its control at the end of hostilities, as indicated in the note on this subject addressed by this Government to the Government of the Union of Soviet Socialist Republics on February 18, 1946.

The Government of the United States is pleased to note that the Government of the Union of Soviet Socialist Republics is ready to discuss at the time and place to be agreed upon the other economic questions referred to in the aforementioned note of February 21, 1946.

The Government of the United States considers that in the case of civil aviation matters of mutual interest to the two countries, this procedure is entirely expedient, and accordingly proposes that negotiations on these questions be begun in Washington on June 1, 1946.

This Government also considers that with regard to arrangements to guarantee that navigation on rivers of international concern should be free and open on terms of entire equality to nationals, vessels of commerce, and goods of all members of the United Nations, the same procedure is entirely satisfactory. In view of the importance of these questions it is deemed desirable that negotiations be begun in Washington on June 1, 1946.

In connection with these two questions, this Government wishes to state that it regards them as of no less importance than the other questions specified in this Government’s note of February 21, 1946.

Subsequent to the aforementiond note of February 21, 1946, this Government has set forth its policy with respect to its foreign credit program in a statement of March 1, 1946, on the “Foreign Loan Policy of the United States Government”, a copy of which is attached to the present note.¹⁴

In accordance with the principles outlined in this statement, it is considered that the extension by the Government of the United States to the Government of the Union of Soviet Socialist Republics of a credit of one billion dollars should assist the Soviet Union in the restoration of the productive capacities destroyed by the war, and should, at the same time, be directed towards the creation of an international economic environment permitting a large volume of trade and expanding mutually beneficial economic relations among nations. Accordingly, this Government considers that certain of the questions which might stand in the way of the sound development of these relations should be freely discussed at the same time that the requested credit is considered, and in particular that the questions specified in Paragraphs 1, 2 and 5 of this Government’s note of February 21, 1946 are so closely interrelated with, and to a large extent concern implementation of, the questions to the immediate discussion of which the Government of the Union of Soviet Socialist Republics has agreed in its note of March 15, 1946, that it would be virtually impossible to discuss the one group of questions without the other. For these reasons it is the position of this Government that, in addition to the four issues referred to in the first paragraph of this note, it is essential that the following economic questions be discussed concurrently therewith:

(a) Claims of American nationals against the Government of the Union of Soviet Socialist Republics including claims arising from actions of the Union of Soviet Socialist Republics in occupied and liberated areas.

(b) Determination of concerted policies to be followed by the United States and the Union of Soviet Socialist Republics together with the United Kingdom, under the terms of the agreement reached at the Crimea Conference, in assisting the peoples liberated from the domination of Nazi Germany and the peoples of the former Axis satellite states of Europe to solve by democratic means their pressing economic problems.

(c) Arrangements to assure adequate protection of the interests of inventors and of writers and other holders of copyrights.

(d) Discussions of other economic questions, pertinent to the scope of negotiations as herein proposed, the settlement of which questions in the opinion of either government would be conducive to the attainment of the aims of these negotiations.

It is proposed herewith that negotiations on the subjects specified in the present note, except as otherwise indicated, should begin in Washington on May 15, 1946. It is further proposed that preliminary discussions with respect to the technical details of the lend-lease settlement should begin on May 5, 1946.

The Government of the United States wishes to make known its view that agreement to discuss in Washington the matters enumerated herein should not preclude or postpone the separate discussion and settlement elsewhere of the same or related questions.

The Government of the United States noted with pleasure the attendance of an observer representing the Government of the Union of Soviet Socialist Republics at the first meetings of the Boards of Governors of the International Monetary Fund and International Bank for Reconstruction and Development held at Savannah, Georgia in March of this year. It desires to express the hope that the Government of the Union of Soviet Socialist Republics will shortly avail itself of the opportunity provided by the Boards of Governors to accept membership in and participate in these institutions. It also desires to indicate its view that successful conclusion of the financial and economic discussions referred to in this note will be facilitated by cooperation of the two Governments in these two of the principal United Nations organizations designed to further international economic progress.¹⁵

Accept [etc.]

James F. Byrnes

14. Published in House Document 489 (79th Cong., 2d sess.). This document by the National Advisory Council on International Monetary and Financial Problems, dated February 21, 1946, was transmitted by President Truman in a special message to Congress on March 1, 1946.

15. A notation by Mr. Collado at the end of this document stated that this paragraph had been “added at the request of & approved by” Secretary of the Treasury Fred W. Vinson, and had been agreed to in the Offices of Financial and Development Policy, International Trade Policy, and the Division of Eastern European Affairs of the Department of State.

    Although the Soviet Union had participated in the Bretton Woods Conference, it had not become a member either of the International Bank for Reconstruction and Development or the International Monetary Fund. Accordingly, the Soviet Union was not at this time entitled to credits from the International Bank nor to the privileges of the Fund. The Soviet Union remained eligible for membership in these two institutions until December 31, 1946, on the same terms as those enjoyed by members who had signed the Bretton Woods Agreement by December 31, 1945.