861.131/5–1350
The Under Secretary of State (Webb) to the Ambassador in the Soviet Union (Kirk)
informal
Dear Mr. Ambassador: Thank you for your letter of May 13 with your suggestion of accepting Soviet rubles in partial settlement of the Lend-Lease Act. I have looked into the matter and find that the Department has been trying to work something out along this line. The background as I understand it from the responsible officers in the Department is as follows:
Throughout the Lend-Lease settlement negotiations with the Soviets the Department has kept in mind the possibility of obtaining rubles from the Soviet Government for use by the Embassy and its staff in Moscow, and this proposal was one of the nine [eleven] points of settlement presented to the Soviets on June 25, 1947.1 The Soviet reply of December 16, 19472 included an agreement “to examine the proposal for the delivery of the U.S.A. within the limits of a definitely agreed amount of Soviet currency for payment by the Government of the U.S.A. of services rendered by the Soviet Union to the Diplomatic Mission of the U.S.A. in the USSR, crediting the sum furnished in Soviet currency to the account of the dollar obligations of the USSR under the lend-lease settlement agreement”. While, as stated in our note to the Soviet Ambassador on January 23, 1948,3 we would not consider the Soviet Agreement as fully responsive to the proposal made by the U.S. side in this matter, it is the belief of the Department that if the settlement negotiations can be pushed over to a point where the two sides are more nearly in agreement as to the over-all amount of settlement it may be possible to break the deadlock at that point by agreeing to accept a sizeable amount of rubles in lieu of U.S. dollars.
The Department has for some time been considering a proposal to accept prior to an over-all settlement a certain amount of rubles to be credited to any Soviet dollar indebtedness that may be agreed upon if and when an over-all settlement is reached. However, having in mind the actions of the Soviet Government with respect to a similar [Page 1299] situation, namely the Litvinov assignment4 in connection with negotiations for compensation of American nationals for their property confiscated by the Soviet Government, it is our thought that it would be unwise to take any action at the present time along this line which might be used by the Soviets to infer that they have already made substantial payments to the U.S. for wartime lend-lease aid. The above reasoning on the surface seems far-fetched; however, in view of past experience it would seem to have considerable validity. Also we cannot lose sight of the possibility that acceptance by the U.S. of rubles in lieu of dollars may result in breaking a settlement deadlock if we are able to push the Soviets more nearly to a settlement in the immediate future.
In this connection the Department will be forwarding a note to the Soviet Embassy here in the immediate future. Should our current efforts be unsuccessful it is contemplated to take advantage of Stalin’s offer to you and to request you to seek audience with him and ask his intervention in order that a settlement may be agreed upon.
Thank you again for your suggestion and for writing me with regard to it. We are always glad to receive your thoughts on any subject, and I know that you realize how often they prove of great value to us here in the Department.
Sincerely yours,
- Foreign Relations, 1947, vol. iv, p. 696.↩
- Note No. 245 from the Embassy of the Soviet Union, ibid., p. 715.↩
- Ibid., 1948, vol. iv, p. 956.↩
- Exchange of letters between President Franklin D. Roosevelt and the People’s, Commissar for Foreign Affairs of the Soviet Union Maxim Maximovich Litvinov, dated November 16, 1933, during the negotiations in Washington for the recognition by the United States of the Soviet Union, Foreign Relations, The Soviet Union, 1933–1939, pp. 35–36.↩