The Acting Secretary of State to the Secretary of State at Moscow
614. Moskco 19. Personal for the Secretary. ReDeptel 524, March 14, 8 p. m. for Ambassador,1 and Clayton’s memo to Secretary of Feb 26 on lend-lease matters, and re Moskco 18 of even date.
An emphatic affirmative self-contained answer to Moskco  of even date re lend-lease pipeline shipments would greatly assist in presenting Dept’s position to Congress if in fact Secretary wishes shipments to continue and Dept. to have discretion in the matter free from legislative restriction. If you have no objection, we should like to show any affirmative reply or paraphrase thereof confidentially to appropriate members of Congress to bolster Dept. presentation.
Third Deficiency Appropriation Act of July 1946 prohibits use of funds so appropriated for any expense incident to shipment abroad of any lend-lease articles after December 31, 1946 whereas Lend-Lease Act authorized deliveries until June 30, 1949 under contracts executed prior to June 30, 1946. GAO ruling makes Congressional legislation or statement of intent to legislate necessary to permit continuation deliveries in fulfillment of “pipeline” agreements with foreign governments under Section 3(c) of Lend-Lease Act so far as concerns appropriations to the President. Appropriations Committees apparently reluctant to authorize shipments in view of recent events, Congressional sentiments and public opinion regarding current relations USSR with respect lend-lease settlement, disposition of lend-lease merchant vessels and other matters.
Total goods for delivery under pipeline agreements after V–J Day amounted to about $1,200 millions, of which $250 millions for USSR. Amount remaining untransferred all countries estimated nearly $25 millions of which $17 millions for USSR. Australia, Guatemala, Belgium have already paid for items involved and all countries are pressing for deliveries. Goods accumulating in warehouses will have to be declared surplus and outstanding contracts cancelled if lend-lease pipeline transfers can not be made. Procurement agencies increasingly embarrassed. Dept. here holds view that breach of pipeline agreements entered into with foreign governments including USSR would compromise US moral position to some extent, would possibly jeopardize collections under USSR pipeline agreement for deliveries already [Page 667] made, would render general settlement discussions mainly with USSR more difficult, and might have other unfavorable repercussions. Some of the undelivered items are necessary to complete units already partly delivered to the USSR.
It would be helpful to be able to tell Congress whether you plan to approach SovGov on lend-lease matters referred to in Clayton’s, memos to you of Feb 26 and 27.
- Not printed. This telegram contained the information that the press quoted the Chairman, John Taber, of the Appropriations Committee of the House of Representatives as saying that the Committee had rejected continuation of the October 15, 1945 agreement deliveries. It further stated that no formal action had actually been taken by either House or Senate Committees. (862.24/3–1447)↩