800.51W89 U.S.S.R./27a: Telegram
The Secretary of State to the Ambassador in the Soviet Union (Bullitt)
35. The following is the full text of the draft proposal in regard to claims and credits written before you left and approved by the President, which was handed to Troyanovsky on February 20th. While it is noted in your 13, March 15, 1 a.m., that Litvinoff gave you a copy, we believe that the text should be communicated to you directly by the Department.
“I have the honor to refer to the conversations between the President of the United States and the Commissar for Foreign Affairs of my Government with regard to the question of the settlement of debts and claims, and to subsequent discussions of that matter, and to inform you that in full settlement of the indebtedness of former Governments of Russia to the Government of the United States and its nationals, and of all claims of nationals of the United States against my Government, arising prior to November 16, 1933, with the exception of claims arising out of contracts for services, goods, supplies, or matériel, entered into between my Government, or an Agent thereof, and American nationals, my Government will pay to your Government, in currency of the United States, the sum of One Hundred and Fifty Million Dollars ($150,000,000.00), together with interest, in the manner hereinafter provided, the payment to be completed within twenty (20) years.
On all credits or loans to be extended after the date hereof to my Government or any of its agencies by your Government, its nationals, or any agencies of either, my Government will pay, in addition to the charges or interest contracted for in each particular transaction, an additional sum hereinafter called ‘additional interest’, namely, ten (10) per centum per annum of the respective amount upon which the contractual charge or interest is based, such additional interest to be paid at the same respective times that the contractual charge or interest is paid. Such additional interest shall be paid to the Export-Import Bank of Washington, D. C, or to any other agency or agencies your Government may designate, for the account of the United States Treasury, and applied first toward the interest on the above sum of One Hundred and Fifty Million Dollars ($150,000,000.00), and thereafter to the reduction of the principal thereof.
A credit or loan is deemed to be extended under the above provisions upon either the opening of an irrevocable credit or the granting of a loan.
My Government will submit to your Government from time to time, as it may be requested, a schedule of all credits or loans extended to it by nationals of your Government.
The said sum of One Hundred and Fifty Million Dollars ($150,000,000.00) shall bear interest at the rate of five (5) per centum per annum, commencing July 1, 1934, payable semiannually, on the first day of January and the first day of July of each succeeding year. Any interest remaining unpaid on these respective dates shall be added to [Page 79] the principal and shall thereafter bear interest at the same rate per annum.
The said sum of One Hundred and Fifty Million Dollars ($150,000,000.00) shall not include, but shall be in addition to, any assets that have been assigned or released to the United States.
My Government waives all demands and claims of every character by it or any of its nationals against the United States or any of its nationals.”
This morning a person states that he has had a confidential talk with Troyanovsky who is anxious for a settlement and talks about One Hundred Million Dollars ($100,000,000.00), evidently forgetting that that figure, because of the devaluation of the dollar, would be even below the minimum amount suggested by Litvinoff when here. As before stated, the devaluation would bring the One Hundred and Fifty Million Dollars ($150,000,000.00) discussed here, down to Ninety Million ($90,000,000.00).
It is hoped that during the President’s absence you may find it possible to obtain a proposal which you will be able to recommend.