840.50 UNRRA/8–945: Telegram
The Ambassador in the Soviet Union (Harriman) to the Secretary of State
[Received August 9—1:41 p.m.]
2820. Reference London’s 274, August 6, 8 p.m.55 For Asst Secretary Clayton. In accordance with your request, for your information I cannot agree with the Russian statement that “Lend-Lease and credit negotiations have failed”.
The United States made a most generous proposal for credit arrangements under Lend-Lease which if the Soviets had accepted would have provided for a continuation of certain shipments. The Soviet declined to accept our proposal because of a difference between our offer of 2⅜ percent interest as against their insistence on 2¼ percent and because they wished the United States Govt to sell supplies to them at a loss. Mikoyan overplayed his hand and no doubt thought that the supplies they needed would be in such oversupply after the war that they could be purchased at lower prices and at better credit terms. The negotiations for a credit for reconstruction have been held up pending the necessary congressional authority to the Export and Import Bank. There is now no reason why the Soviets cannot now negotiate a credit.
I have little to add to the Acting Secretary’s cable to you No. 1760, August 7, 8 p.m.56 in which I fully concur on the subject of Russia’s request for UNRRA assistance. It may be of interest for you to know that Doctor Michael, this Embassy’s Agricultural Attaché, believes that there should be enough food from sources available to Russia to sustain the Russian people on a minimum diet. There will, of course, be a shortage of fats and meats for a desirable diet although an increase over last year.
I feel also that we should bear in mind the fact that Lend-Lease supplies came forward to the Soviet Union in large volume by shipments leaving the United States up to the end of May. A very large quantity of these supplies are available for current use including food, trucks, raw materials, machine tools, et cetera.
Large numbers of Russian troops are living off the country in Germany and the satellite countries. In general, Russia’s situation cannot be compared with the difficult position of countries which were completely occupied by the Germans.
Sent to London as 394, repeated to Dept as 2820.