Foreign Relations of the United States, 1947, Eastern Europe; The Soviet Union, Volume IV

861.24/5–1347

Memorandum Concerning Estimated Inventory of Lend-Lease Articles in the Possession of the Soviet Union After the Termination of Hostilities Against Japan¹

undated

confidential

From time to time since the late summer of 1945 the United States has asked the U.S.S.R. for an inventory of lend-lease supplies remaining in the possession of the U.S.S.R. The purpose requests was to ascertain what materials of lend-lease origin the U.S.S.R. held at end of the war, particularly since a large part of such materials could be used for the general benefit of the Soviet post-war economy and since lend-lease aid was intended only as a measure of war assistance. As the United States did not propose to make any charge for materials consumed in the common war effort, it was considered important that an inventory be taken at the war’s end.

The U.S.S.R. delegates have stated that no such inventory has been prepared by their side. In order to progress toward a settlement, the U.S. side has undertaken to submit estimates of inventories of certain categories of materials of lend-lease origin considered by it as in the possession of the U.S.S.R. at the termination of hostilities or received thereafter. The general principles which governed the determination of such estimates and the results of these estimates are set forth below.

I. Principles

1. The inventory estimates referred to in this paper exclude:

(a) Articles which the U.S. considers to have been lost, destroyed or consumed during the war and prior to September 2, 1945;

(b) Vessels in Lists 1, 2 and 3² handed to the Soviet Delegation on May 7, which vessels will be dealt with separately;

(c) Items of a type appearing in List 4³ handed to the Soviet Delegation on May 7, which items will be dealt with separately;

(d) Articles transferred under the cash payment terms of Mr. Crowley’s⁴ letter to General Rudenko of May 30, 1945;⁵ and

(e) Articles transferred under the terms of the agreement of October 15, 1945.

2. The inventory estimates are based upon U.S. records of articles arrived in the U.S.S.R. Flight-delivered aircraft and cargo delivered by air are considered as arrived in the U.S.S.R. upon delivery to Soviet control. For the purposes of these estimates, arrivals in the Persian Gulf are considered as arrivals in the U.S.S.R.; however, allowances have been made to take into account the time consumed in delivery from the Persian Gulf to Soviet territory.

3. The estimated values shown in the inventory are the sums of appropriate proportions of the costs to the U.S. of the individual articles in each category, including charges for inland transportation. An over-all charge has been added for ocean freight on U.S. operated vessels.

4. All articles which were enroute from the United States to the U.S.S.R. on September 2, 1945 and which were shipped from the United States during the lend-lease termination period, September 2, to September 20, 1945, are valued at full cost.

5. For the purposes of the estimates articles have been divided into consumable goods and durable goods. Consumable goods include articles which are consumable without alteration, e.g., food; articles which are changed in the manufacturing process, e.g., metal, chemicals, etc.; and articles which by their nature are widely distributed and thereby no longer identifiable, e.g., footwear, wearing apparel, small hand tools, etc.

6. In the great majority of instances only those consumable articles which arrived in the U.S.S.R. after June 1, 1945 have been included in the estimated inventory. In a very few instances articles have been included which arrived prior to that date and then only those articles which arrived after March 1, 1945. These are considered to be conservative estimates. It may well be that much larger amounts of consumable goods were in the U.S.S.R. inventories on September 2, 1945. Such consumable items as have been included were valued at full cost.

7. Durable goods have been subdivided into two groups: (a) those which were intended for use in the Soviet theater of operations and (b) those intended for use in the areas untouched by combat damage. Liberal combat loss allowances have been made for articles used in the theater of operations beginning at the estimated times of arrivals in the combat areas. Examples of items in category (a) are: trucks, railway equipment, and certain types of construction equipment. Durable goods intended for use in the supporting economy of the U.S.S.R. have been depreciated in accordance with rates applicable to wartime industrial use. Depreciation has been applied beginning at the estimated time of arrival at place of use. Industrial projects not installed and not in operation on September 2, 1945, have been counted at full cost. Examples of items in category (b) are: machine tools, industrial plants and most other machinery and equipment. In both cases factors have been included to allow for losses in transit in the U.S.S.R.

II. Estimated Inventory

The total value of lend-lease aid provided by the United States under the Master Agreement of June 11, 1942 amounted to $11,100,000,000. Of this amount, aid totalling roughly $7,500,000,000 is attributable to articles in the categories included in this inventory which excludes ships in Lists 1, 2 and 3, and combat items in List 4. These lists were handed to Soviet representatives on May 7, 1947. This inventory, depredated to September 2, 1945, is estimated at approximately $2,607,000,000 as compared with the $7,500,000,000 of aid mentioned above. The total of $2,607,000,000 is the sum of Class I consumable articles estimated at $357,000,000 and Class II durable articles estimated at $1,960,000,000 plus $290,000,000 for ocean freight. These amounts are distributed as set forth below.

class i articles (consumables)

Airplane landing mats	$ 5,386,000
Parts & equipment for vehicles	34,093,000
Explosives	4,194,000
Radio & radar parts, etc.	5,632,000
Parts for R.R. transportation equipment	8,000
Medical supplies	9,942,000
Miscellaneous military items	124,000
Ship equipment, marine engines, etc.	17,303,000
Food	143,986,000
Misc. equipment & parts for machinery	6,731,000
Metals	53,313,000
Petroleum products	18,040,000
Chemicals	9,179,000
Other	49,142,000
Total, before adjustment for ocean freight	$357,073,000
class ii articles (durables)
Transport planes & flying boats	$ 154,079,000
Non-combat vehicles	559,543,000
Radio stations, receivers, locators, beacons	75,012,000
Road & airport construction equipment	8,337,000
R.R. locomotives & cars	207,975,000
Cableway bridges, portable pipelines, portable storage tanks, pontoon bridges, tents, truck assembly sets	8,338,000
Outboard motors	142,000
Salvage stations & diving gear, jetting apparatus, submarine rescue chambers, distilling apparatus & collapsible piers	977,000
Machinery & equipment	945,790,000
Total, before adjustment for ocean freight	$1,960,193,000
Recapitulation
(With adjustment for ocean freight)
Class I Articles (Consumables)	$ 357,073,000
Class II Articles (Durables)	1,960,193,000
Adjustment for ocean freight ½ of 25%*	$2,317,266,000
	289,658,000
Total Inventory Estimate	$2,606,924,000

The above tables do not include certain categories of aviation equipment such as aircraft engine and flight instruments, link trainers, aviation repair shops, aircraft and airway lighting equipment and aerial photographic equipment.

1. This memorandum was handed to the Soviet Union Delegation at the meeting of the Combined Working Groups on May 13.
2. None printed. List 1 was concerned with merchant vessels transferred to the Government of the USSR under the Lend-Lease Act; List 2 was a list of lend-lease craft transferred by the United States Government to the Government of the Union of Soviet Socialist Republics, through 30 April 1947 for which receipts are on file in the U.S. Navy Department; and List 3 comprised military water-craft transferred under lend-lease.
3. Not printed. List 4 dealt with categories of items as to which the U.S. side wishes to know: (a) Quantities held on V–J Day and, (b) Quantities presently held.
4. Leo T. Crowley, Administrator, Foreign Economic Administration.
5. Foreign Relations, 1945, vol. v, p. 1009.
6. Experience has indicated that 25% of the cost of articles f.a.s. is a reasonable adjustment for ocean freight charges. Since the United States proposes no charges for ocean freight on Soviet operated vessels which carried ½ of the lend-lease cargo transported to the U.S.S.R., this adjustment has been reduced by ½. [Footnote in the original.]