861.24/12–1746
The Lend-Lease Administrator (Lane) to the Chairman of the the Government Purchasing Commission of the Soviet Union in the U.S.A. (Eremin)
Dear Mr. Eremin: Your letter of December 16, 1946,51 in reference to mine of November 27th, has just been received.
As you are aware, the request of my letter of November 27th was that your Government make available the necessary funds not later [Page 860] than December 15, 1946. This was not a casually selected date, but bore a direct relation to the very acute problems of the Treasury Department in working out a method of making possible continued delivery of pipeline goods after December 31st. For your information, each of the other governments concerned has already given its answer to my proposal, and made the deposit of the necessary funds.
In any further consideration given to the matter by your Government, either here or in Moscow, there should be kept clearly in mind the fact that no further deliveries whatsoever of these pipeline goods can be made after December 31, 1946, unless and until the Treasury Department has been furnished with the necessary deposit of 2½% of the procurement cost of the goods to be delivered. This applies even to goods of which your government is prepared to take delivery at factory or warehouse, and of course includes any portion of the refinery equipment which may still be undelivered as of that date.
Also, in order to enable the Treasury Department to make plans for the number and type of personnel which will be retained after December 31, 1946, we will have to begin immediately a careful consideration of the question of cancellation of contracts on which production is not expected to be completed by that date.
You will of course understand from my letter of November 27th that entirely apart from the 2½% of procurement cost required to be deposited to cover Treasury administrative expenses, the. Treasury Department must also be put in funds in advance for any accessorial expenses which it may be called on to incur after December 31, 1946. One such expense which, from a practical point of view, it appears necessary for the Treasury to handle on your behalf is the expense of storage; and present Treasury estimates are that storage charges, during the initial period, will run in the neighborhood of $50,000 a month. Funds to cover storage for a period of two months should be put up with the Treasury Department, on the understanding that upon determination of actual charges appropriate adjustments will be made, either by refunds to your Government or by additional payments by your Government to the Treasury, as the case may be.
Yours sincerely,