United States Side Minutes of First Combined Meeting on Lend-Lease Settlement Negotiations1

  • Present
    • U.S.
      • Mr. W. L. Thorp, U.S. Chairman
      • Mr. H. R. Labouisse, Jr., (U.S. Deputy Chairman)
      • Mr. W. C. Armstrong
      • Mr. T. C. Blaisdell
      • Mr. C. I. Blau
      • Mr. M. H. Cardozo
      • Mr. R. G. Hooker
      • Mr. N. T. Ness
      • Mr. A. N. Overby
      • Mr. N. N. Pearson
      • Mr. L. E. Thompson
      • Mr. C. C. Matlock, U.S. Principal Secretary
      • Mr. G. F. Truesdell, U.S. Assistant Secretary
      • Mr. H. H. Ware, U.S. Interpreter
    • U.S.S.R.
      • The Soviet Ambassador, Mr. Nikolai V. Novikov
      • Mr. A. A. Arutiunian
Mr. Thorp opened the meeting by welcoming the Soviet Ambassador and Mr. Arutiunian.2 Discussion as to the languages to be used in the negotiations resulted in agreement that, although English would be used in most instances, Russian would be employed when occasion demanded. Mr. Thorp stated that the U.S.S.R. Lend-Lease program was the second largest undertaken by the United States, being surpassed in magnitude only by the United Kingdom program. He advised the Ambassador that settlements with the United Kingdom and several other major countries had already been made and that the United States had been greatly concerned over the delay in opening of negotiations for a settlement with the U.S.S.R. but was happy that these negotiations were now under way.
In outlining the procedure to be followed, Mr. Thorp stated that the United States had organized a group of specialists in the various fields to be covered. He named Mr. Labouisse3 as Chairman of the [Page 681] U.S. group and Mr. Matlock as the Secretary. Arrangements for meetings and other administrative details would be handled through Mr. Matlock.
Mr. Thorp stated that there had been prepared by the U.S. side a list of subjects for discussion and investigation by the working group or groups. He handed to the Soviet Ambassador, and there was distributed generally among those present, a document entitled “Major Subjects for Fact Finding by Working Groups”. A copy of this document is attached.4
Referring to the first item on the list, Mr. Thorp asked if the Soviet Ambassador might have with him or available to him an inventory of lend-lease supplies under U.S.S.R. control at the close of hostilities. Mr. Thorp mentioned his letter to the Soviet Embassy of February 18, 19465 requesting such an inventory. The Soviet Ambassador recalled receiving such a request but made no further comment. Mr. Thorp explained that the scope of the settlement depended upon the magnitude of the defense aid provided and inventories remaining and that there must be agreement as to the facts before a settlement could proceed.
As to merchant vessels the Soviet Ambassador stated that the inventory was elementary and would cause no difficulty. He inquired as to the nature of the inventory required. He said that a detailed inventory of the supplies remaining on hand at the close of hostilities would be very difficult to prepare. Mr. Thorp replied that another approach would have to be made if no inventory were available. The Ambassador stated that he would prefer some procedure which would allow over-all considerations to govern rather than considerations based on a detailed inventory. He asked if the United States had in mind a general plan of settlement and to proceed on a general plan first and to take up the details later on in the negotiations.
Mr. Thorp brought up the subject of claims arising from lend-lease operations. He pointed out that this was a matter for preliminary fact-finding by working groups. He called upon Mr. Armstrong6 to cite examples of the types of claims which might be discussed. Mr. Armstrong mentioned U.S. claims for ocean freight charges paid from lend-lease funds which the U.S. felt should have been paid by the U.S.S.R. in cash. He also mentioned U.S. claims for damages to U.S. ships in Soviet ports and possible U.S.S.R. claims for damages to Soviet ships in U.S. ports.
Mr. Thorp said the U.S. wished a complete clean-up of all lend-lease problems, and pointed to the magnitude and complexity of the lend-lease operation. He said that the problem of a settlement with the U.S.S.R. was not nearly so complex as had been the case in settlements with some of the other countries. He cited, as an example, problems which had arisen because U.S. troops had been stationed in the territories of some of the other lend-lease countries.
Mr. Thorp mentioned patent obligations under Article IV of the Soviet Master Lend-Lease Agreement and commercial policy under Article VII. He said that the United States wished to clean up any patent problems arising from lend-lease and to discuss commerical policy matters in accordance with the agreement.
Mr. Thorp enquired as to the size of the Soviet delegation and the assistance available to the Ambassador for lend-lease settlement work. The Soviet Ambassador replied that Mr. Arutiunian and some other experts had accompanied him from Moscow for the purpose and that Mr. Eremin would come from the Purchasing Commission offices in New York to aid him. He said he was concerned over the detailed approach and feared that if each problem were considered in detail it would take a long time to complete a settlement. Mr. Thorp stated that the United States did not desire a long negotiation on its part.
Mr. Thorp explained that the U.S. had aided the U.S.S.R. through lend-lease to the extent of slightly more than $11 billion. He went on to say that the problem was one of arriving at a for beginning discussions; however, in the absence of an inventory, it would be necessary to use whatever information was available.
The Ambassador enquired if all the items would be discussed together or would be dealt with separately. Mr. Thorp replied that it was planned to discuss them separately for the most part. The Ambassador agreed to detail individuals to the specific problems as they arose. Mr. Thorp agreed to this procedure and stated that the Secretary of the U.S. group would notify the Soviet side of the matters to be discussed and the times for meetings. In this connection the Soviet Ambassador mentioned the Soviet holidays on May 1 and 2. It was agreed that Mr. Labouisse, Mr. Matlock and others would meet with Mr. Arutiunian on Saturday7 at 11:00 a.m. to explore further the specific subjects to be discussed at the working level. At this meeting on Saturday arrangements would be made for a second meeting the first of the week. It was agreed that group meetings would be informal.
The meeting adjourned at 1:35 p.m.

The Soviet Ambassador and his aide remained for about ten minutes after the meeting adjourned. Mr. Thorp reported some remarks [Page 683] the Ambassador had made to him before taking his departure. The Ambassador had stated that in his opinion a settlement could be made on an over-all basis. He emphasized that the political aspects of the settlement were important, implying that a lump sum settlement would be in order and that account should be taken of the combined effort of the two countries in the defeat of Hitler. Mr. Thorp replied that the magnitude of the material aid rendered by the U.S. should be the terms of the discussions.

Mr. Labouisse expressed his opinion that we should advise the Soviet Ambassador that the U.S. does not expect to receive payment for articles lost, destroyed, or consumed during the war. When he met with Mr. Arutiunian he would have to have something to add to the position of the U.S. over and above what had been said at the meeting just concluded.

Mr. Thompson stated that in his opinion the amount to start with should be large. Mr. Thorp expressed agreement pointing out that Arutiunian was an Armenian and a great trader.

Mr. Hooker8 asked if the minimum arms list could be used in determining the articles for which payment would not be sought and for which recapture rights would be retained by the U.S. Mr. Thompson expressed his opinion that the recapture right should be retained and that he favored Plan A the minimum list.

Mr. Thorp concluded the discussion by stating that the Ambassador had expressed his hopes that the negotiations would not be patterned strictly after the British and French cases.

  1. These are not agreed combined minutes. This meeting was held in the Department of State, beginning at 1:05 p. m.
  2. Amazasp Avakimovich Arutyunyan, expert on Soviet international economic relations, deputy to Ambassador Novikov in the negotiations for a lend-lease settlement agreement.
  3. Henry R. Labouisse, Jr., special assistant to the Director of the Office of European Affairs.
  4. Not printed.
  5. Foreign Relations, 1946, vol. vi, p. 827.
  6. Willis C. Armstrong, assistant adviser on state trading, European Branch, Division of Commercial Policy.
  7. May 3.
  8. Robert G. Hooker, Jr., Assistant Chief of the Division of Eastern European Affairs.