285. Memorandum of Conversation1


  • Conversation Between the President and Chairman Kosygin

In a brief conversation with Kosygin just before dinner, Kosygin told the President that both sides had reached complete agreement on the lend-lease matter, including a schedule of payments and the principal amount, but that the United States insistance on 5½% per annum would increase the total amount of repayment from $500 million to $914 million, almost $1 billion.2 He said that he could not in good faith report to his Council of Ministers (of whom there were about 90) and justify such a high figure. He stressed that he would not want to pressure the President, that if this problem was not settled during the current meeting, the Soviet Union would not be the loser. In fact, it might be possible that this loan would continue to be carried on the books of the US for some ten more years but eventually it would be written off just like the debts of the Czarist Russian Government had been written off. The President said he would discuss this matter with his advisors and that we would do what we could.3

  1. Source: National Archives, RG 59, Central Files 1970–73, POL USUSSR. Secret; Nodis. Drafted by William D. Krimer, Interpreter (ACDA) on May 27. The meeting was held in the U.S. Embassy in Moscow.
  2. In telegram Secto 32 from Moscow, May 26, Secretary Rogers transmitted a message to Assistant Secretary of State for Economic Affairs Willis C. Armstrong in Washington describing the respective U.S. and Soviet positions on a lend-lease settlement following a 2-hour meeting with Kosygin that day. Rogers stated that the basic difference between the two sides was obviously the wide-spread between the interest rate the United States wanted and that which the Soviets were willing to pay. He said Kosygin had stressed his lack of flexibility on this point but said he would consult his colleagues and suggested that they consult with the President. (Ibid., Nixon Presidential Materials, NSC Files, Kissinger Office Files, Box 73, Country Files, Europe, USSR, Moscow Summit, Economic Commission)
  3. In telegram Tosec 135 to Moscow, May 27, Armstrong responded that a settlement along the lines of $500 million with interest at 2 to 3 percent was the sort envisaged by those in charge of lend-lease at the end of the war, and wrote: “To drive a harder bargain now than we would have sought at the end of the war is not reasonable for the United States and acceptance is not feasible for the USSR.“ Armstrong pointed out that the fact that they did not reach agreement promptly at the end of the war was something for which both governments shared responsibility. (Ibid., Country Files, Box 719, Europe, USSR, Vol. XXII, May 1972) The same day, in telegram Tohak 204 from the Situation Room, Secretary of Commerce Peter G. Peterson advised Kissinger to remember the important domestic point that the first lend-lease payment must start either before or at the same time as credits were actually granted to the Soviet Union to meet the obvious question of why grant new credits when the Soviets were not paying their old debts. (Ibid., Box 480, President’s Trip Files, President’s Moscow, Iran, Poland, Austria Trip. May–Jun 72, TOHAK (File No. 2), Situation Room [Part 2])