Foreign Relations of the United States, 1950, Central and Eastern Europe; The Soviet Union, Volume IV

761.56/6–3050

The Chargé of the Soviet Union ( Bazykin ) to the Secretary of State

No. 108

Washington , June 30, 1950.

[Translation]

Sir: Upon instruction of the Government of the Union of Soviet Socialist Republics, I have the honor to state that instructions have been given by the Soviet Government to carry out the regular (Fourth) payment to the Government of the United States of America of interest according to the Agreement between the USSR and the USA of October 15, 1945.¹

As has already been pointed out in the Soviet notes of July 4, 1947,² January 11, 1949,³ and July 2, 1949,⁴ the Government of the USA has violated its obligations under the Agreement between the USSR and the USA of October 15, 1945, having unilaterally discontinued shipments under it in January, 1947,⁵ and is not fulfilling its obligations according to the Soviet-American Trade Agreement of 1937,⁶ since it practices discrimination in relation to the USSR. In view of this, and as a result of the necessity of safe-guarding the interests of Soviet economic organizations, the following sums have been withheld from the regular payment of interest:

(a) 490,000 American Dollars comprising the interest on the value of the equipment which is incomplete as a result of the cessation of shipments under the Agreement of October 15, 1945 by the Government of the USA;

(b) 400,000 American Dollars as reserve for compensation of damages caused to Soviet economic organizations by the discriminatory actions of the Government of the USA in relation to the export to the USSR of equipment which was ordered prior to the introduction in 1948 of new regulations prohibiting the export of goods from the USA.

The Purchasing Commission of the Union of Soviet Socialist Republics in the USA can, in case of need, transmit the details relative to these damages.

The regular (Fourth) payment is calculated in the amount of 6,007,427 American Dollars including the interest for preceding years on the value of equipment, accounts for which had not been received on time. Deducting the withholdings set forth above, the amount for payment consists of 5,117,427 American Dollars.

Accept [etc.]

V. Bazykin

1. For text of the agreement relating to the disposition of lend-lease supplies in inventory or procurement in the United States (the “pipeline” agreement) signed at Washington on October 15, 1945, see Department of State Treaties and Other International Acts Series (TIAS) No. 3602, or United States and Other International Agreements (UST), vol. 7 (pt. 7), p. 2819.
2. Note No. 118, Foreign Relations, 1947, vol. iv, p. 702.
3. Note No. 2, ibid., 1949, vol. v, p. 690.
4. Note No. 80, ibid., p. 710.
5. On the origins of the discontinuance of the shipments of materials to the Soviet Union which began in January 1947, see the documentation on lend-lease in ibid., 1947, vol. iv, pp. 653 ff., and especially the memorandum of December 12, 1947, by Mr. Michael H. Cardozo of the Office of the Legal Adviser, ibid., p. 713.
6. For documentation on the conclusion of a commercial agreement between the United States and the Soviet Union on August 4, 1937, see Foreign Relations, The Soviet Union, 1933–1939, pp. 405 ff.