The Ambassador of the Soviet Union (Panyushkin) to the Secretary of State
Mr. Secretary of State: Confirming the receipt of your note of July 26 of this year, I have the honor, upon instructions from the Government of the Union of Soviet Socialist Republics, to communicate that the Soviet Government has given instructions to make the second interest payment to the Government of the United States in accordance with the Agreement between the USSR and the USA of October 15, 1945.
In determining the amount of the payment the Government of the Union of Soviet Socialist Republics bases itself on the following:
- In accordance with the note of the Soviet Government of July 4, 1947, $490,000, relating to the cost of equipment delivered incomplete, are being deducted from the amount of the regular interest payment under the Agreement of October 15, 1945.
- The assertion of the Government of the USA that risks of damages which could arise as a result of the non-receipt of export licenses should be considered as accepted by the parties at the time of the concluding of the purchase-sale contracts by them cannot be considered sound in as much as the parties at the time of the conclusion of the contracts could not foresee the subsequent changes in commercial policy by the Government of the USA and its issuance of new regulations which in their practical application are discriminatory toward the USSR and render impossible the fulfillment of the contracts concluded.
The total of damages of Soviet agencies, according to the claims presented by American firms as a result of the compulsory termination of the fulfillment of the contracts, amounts at the present time to $1,300,000, in which connection part of this amount has already been withheld by the firms from advances and credits made earlier by Soviet [Page 1002] agencies to these firms. In this connection, the Government of the Union of Soviet Socialist Republics is withholding as compensation for the damages mentioned, $1,300,000 from the amount of the regular interest payment.
Said amount of $1,300,000 refers only to a part of the claims asserted by American firms and far from covers the entire damage caused to Soviet agencies by the discriminatory actions of the Government of the USA, and the Soviet Government reserves the right to demand payments by the Government of the USA of all damages after they have been determined.
After the deduction of the interest on the cost of the equipment delivered incomplete, and also of the amount of $1,300,000 mentioned, the sum being presented by the Government of the USSR as the regular interest payment in accordance with the Agreement of October 15, 1945 amounts to $3,341,446.
As regards the statement of the Government of the USA that it is difficult for it to comment on the question of the claims of firms in the USA upon Soviet agencies until it is informed as to the details of these claims, of course the Government of the USA will be informed in due course by the President1 of the Purchasing Commission of the USSR in the USA concerning the details relating to these claims.
- At this time the President of this commission was Ivan Andreyevich Yeremin (Eremin).↩