Foreign Relations of the United States, The Soviet Union, 1933–1939

800.51W89 U.S.S.R./102

The Department of State to the Embassy of the Soviet Union ⁴³

undated

The conversations that occurred when Mr. Litvinoff was in Washington, participated in by the President, the Secretary of the Treasury and Mr. Bullitt, contemplated a settlement being made on the following general basis.

I. Over and above all claims of the Soviet Government and its nationals against the United States and its nationals the Soviet Government is to pay the Government of the United States⁴⁴ an agreed amount bearing an agreed rate of interest, the payment of which will extinguish all claims of each country and its nationals against the other and its nationals. The payment is not to operate as impairing the assignment to the United States heretofore made of assets in this country supposed to belong to the Soviet Government.

II. The payment of the amount agreed is to be effected by applying thereto an agreed rate of interest beyond the ordinary rate, called added or extra interest, on all credits granted to the Soviet Government by the Government of the United States or its nationals.

The determination of the amount to be paid in settlement of the indebtedness necessarily carries with it the understanding that it will be paid within a reasonable period.

III. The Government of the United States is to grant credit to the Soviet Government and with this object in view has established the Export-Import Bank. The Bank will assist in financing Soviet purchases in the United States through the discount of Amtorg acceptances received by American exporters in connection with specific transactions approved by the Bank and for that part of the credit which the exporter would not be expected itself to carry. The maturities of such acceptances will vary according to different categories of goods, with final maturity in no case to exceed five years. The aggregate of the credits which will be facilitated and approved by the Bank for the period during which the Soviet Government is repaying the agreed amount of indebtedness will of necessity considerably exceed double that amount.

The President has stated that he never had any idea of a direct loan to the Soviet Government—in the form of an advance of money to the Soviet Government or to an agency of the Government,—but only a loan in the form of credits and that there is not the slightest possibility of a direct loan being made, and that he never had any idea of an uncontrolled credit being pledged.

43. Handed to the Ambassador of the Soviet Union on July 25, 1934.
44. A marginal notation in pencil on a draft of this memorandum is as follows: “In the confidential notes exchanged by the President & Litvinoff, it was understood that the amount would not be less than seventy-five or more than one hundred & fifty million dollars”. (800.51W89 U.S.S.R./85½)