The Secretary of State to the Ambassador of the Soviet Union (Panyushkin)
Excellency: I have the honor to acknowledge receipt of your note No. 146 of August 10, 1948 concerning the second payment of interest made by your Government under the post-war Lend-Lease Agreement of October 15, 1945. You state that in accordance with the note of your Government dated July 4, 1947, a deduction of 490,000 dollars has been made from the amount of this payment in connection with equipment delivered by the United States under the Agreement in incomplete units and that a further deduction of 1,300,000 dollars has also been made to compensate the Soviet Government for damages incurred as a result of the non-receipt of export licenses from the Government of the United States.
In my note of July 26, 1948 it was stated that the Government of the United States is willing to accept tentatively payment of interest due July 1, 1948 under the Agreement of October 15, 1945 on a reduced basis in accordance with the principles set forth in the note of your Government of July 4, 1947 and used by your Government in making payment of interest due July 1, 1947. It was also stated in this note that in accepting payment of a reduced amount of interest at this time, the Government of the United States reserves its right to claim such additional amounts of interest as may be due as a result of the discussions [Page 1011] proposed in this Government’s note of November 17, 1947 concerning the losses stated by your Government to have resulted from termination of deliveries under the Agreement of October 15, 1945.
The Government of the United States cannot accept, however, the action of your Government, deducting from the interest due the sum of 1,300,000 dollars as compensation for damages claimed to have been incurred by your Government as a result of non-receipt of export licenses. The Agreement of October 15, 1945 firmly fixes the obligations of the Soviet Government to make annual payments of interest on the total amount due and contains no provision for modification of such payments by unilateral action of the Soviet Government. This Government, therefore, notifies the Government of the Union of Soviet Socialist Republics that interest in the amount of 1,300,000 dollars is now past due under the Agreement of October 15, 1945 and prompt payment is hereby requested.
As stated in my note of July 26, 1948 the Government of the United States cannot comment on the claims of your Government for damages alleged to have resulted from United States export control procedures until it has been informed as to the details of the claims Which you state, in your note of August 10, 1948, will be submitted in due course by the President of the Government Purchasing Commission of the Soviet Union in the USA.