861.51/8–2946

Memorandum by the Acting Chief of the Division of Lend-Lease and Surplus War Property Affairs (Matlock) to the Director of the Office of Financial and Development Policy (Ness)

The Department has taken the position heretofore that the negotiation of a loan to the Soviet Government should be coupled with discussions of a number of outstanding economic questions such as a comprehensive treaty of friendship, commerce, and navigation; methods of giving effect to the terms of Article VII of the Soviet Master Lend-Lease Agreement of June 11, 1942 (including the Department’s “Proposals for Expansion of World Trade and Employment [”]) and the general settlement of lend-lease obligations in accordance with the provisions of the Master Agreement.

In view of recent developments which preclude the immediate possibilities of a loan to the Soviet Union either through the Export-Import Bank or by direct Congressional action feeling has grown among those familiar with the Soviet situation that it might be advisable to initiate a Lend-Lease settlement independently of a loan and other economic matters. The attached memorandum38 from Mr. Truesdell39 to me sets forth the advantages and disadvantages of following this course.

As Mr. Havlik40 mentioned in his memorandum to you dated August 23, 1946,41 Mr. Clayton has given his opinion that a lend-lease settlement with the Soviet Union should be attempted independently of other economic questions. Accordingly a note to the Soviet Government proposing the commencement of negotiations in the near future is being prepared by this Division for clearance within the Department.42

  1. Memorandum of August 29, 1946, not printed.
  2. George E. Truesdell of the Division of Lend-Lease and Surplus War Property Affairs.
  3. Hubert F. Havlik, Acting Chief of the Division of Investment and Economic Development.
  4. Not printed.
  5. See the note of Septemer 14, 1946, p. 854.