Lend-lease in early post-war Soviet-American relations

From the end of May to the middle of October 1945, negotiations on the 3 (C) Agreement were held again at the suggestion of Harriman. The final cessation of Lend-Lease shipments following the end of the war with Japan was formalized in an appropriate way. Within a few days, the Chairman of the Government Purchasing Commission of the Soviet Union in the United States of America, General Leonid Rudenko, got a note from Crowley who informed him of the general principles of supplies valid till September 20, 1945 The Foreign Economic Administrator (Crowley) to the Chairman of the Government Purchasing Commission of the Soviet Union in the U. S. A. (Rudenko). August 27, 1945 // FRUS. 1945. Vol. V P. 1033-1034..

An Agreement on the disposition of Lend-Lease supplies in inventory or procurement in the United States was signed on October 15, 1945. According to its terms, the U.S.S.R. was given a loan to pay for previously ordered, but under-supplied before September 20, 1945 (the official date of the full termination of deliveries in the U.S.S.R.) goods and equipment in the amount of $ 240.2 million with a maturity of 30 years and at interest rate of 2%% per annum Butenina N. V. Lend-Liz: sdelka veka. P. 165..

At its conclusion, the consent of the U.S. government was obtained to provide the Soviet side with 17 cargo ships to transfer the supplies on the conditions of Lend-Lease, i.e. without payment Rossiiskii gosudarstvennyi arkhiv ekonomiki (RGAE). F. 413. Op. 12. D. 9870. L. 56-59.. As a result, freight savings of about $ 6 mln, attributable to LendLease, were achieved Ibid..

It should be noted that despite the considerable cooling in bilateral relations and the faint interest of the U.S. in the Soviet participation in military operations against Japan, the United States had honorably fulfilled its obligations under Lend-Lease agreements. During the first 9 months of 1945, the Lend-Lease supplies received by the U.S.S.R. amounted to 65% of the volume of 1944 ($ 1.7 bln versus $ 2.6 bln), whereas supplies to the United Kingdom for January-September 1945 amounted to only 47% of the same period in 1944 ($ 1.88 bln against $ 4.01 bln) Ibid. L. 5, 6..

Dwelling on the political role of Lend-Lease in Soviet-American relations, it should, first of all, be stressed that the formal cessation of Lend-Lease deliveries in May 1945 was not «a complete surprise» for the Soviet leadership as it sounded in the answering note submitted by the Soviet chargй d'affaires Nikolay Novikov on May 16 AVPRF. F. 6. P. 45. D. 702. L. 2., and as it is commonly believed in the national historiography Pechatnov V. O. Ot soyuza -- k vrazhde (sovetsko-amerikanskie otnosheniia v 1945-1946 gg.) // Kholodnaya voina: istoricheskaia retrospektiva / eds N. I. Egorova, A. O. Chubarjan. Moscow, 2003. P. 35.. This can be proved by documentary evidence.

First, on January 7, 1944, in a letter to the Secretary of State Hull, Harriman refers to his conversation with the People's Commissar for Foreign Affairs, Viacheslav Molotov, held on December 31, 1943. During this conversation, Molotov asked Harriman about the prospects for post-war U.S. assistance to the Soviet Union. The latter warned him about the legal limitations of Lend-Lease and suggested that the «possibility of the extension by an agency of the United States Government to the Soviet Government of a credit for the purchase in the United States of equipment and supplies for reconstruction» be discussed. He recommended Molotov to forward the list of the needed supplies to Washington at the earliest possible moment. Harriman further relates that Molotov «showed the keenest interest and by his questions and comments indicated that he understood and approved (italics added. - K.M.) the approach I had outlined» The Ambassador in the Soviet Union (Harriman) to the Secretary of State. January 7, 1944 // FRUS. 1944. Vol. IV. P. 1032-1033.. The collection of documents on the U.S. foreign policy, in which this letter was published, was released in 1944, making any falsification of facts in favor of the United States absolutely impossible.

Secondly, in the middle of March 1944, Harriman met with Mikoyan, the People's Commissar for Foreign Trade, where he presented all the proposals of the U.S. administration on the organization of post-war supplies to the U.S.S.R. The Ambassador in the Soviet Union (Harriman) to the Secretary of State. March 17, 1944 // Ibid. P. 1063-1065. In a message to Hull dated March 23, 1944, Harriman communicated that «he discussed the idea expressed in article 2 of proposed agreement» which mentioned termination of Lend-Lease supplies after the determination of the end of hostilities by the president of the United States The Ambassador in the Soviet Union (Harriman) to the Secretary of State. March 23, 1944 // Ibid. P. 1069-1071..

It is extremely important to note that in a conversation with Harriman on June 11, 1945, Mikoyan confessed to him that he knew about the alleged cessation of supplies after the end of hostilities in Europe, but did not expect it to happen so suddenly. In addition, Mikoyan recalled that the proposal to begin negotiations on the Fifth Protocol made by the American side in early 1945 made him think that the Americans had decided to change the terms of the Lend-Lease program Memorandum of Conversation, by the First Secretary of Embassy in the Soviet Union (Page). June 11, 1945 // FRUS. 1945. Vol. V. P. 1019-1020..

Thirdly, the Foreign Policy Archive of the Russian Federation holds an aide-memoir handed by the U.S. Assistant Secretary of State, Dean Acheson, to the Soviet ambassador to the United States, Andrey Gromyko, on May 24, 1944. It suggests discussing a draft of the proposed agreement supplementing the Preliminary Agreement of Mutual Aid between the two governments, dated June 11, 1942. This part of the document reads: «The subject matter of the proposed agreement is a plan for the continuance of an uninterrupted flow of Lend-Lease supplies to the Soviet Union during hostilities against our common enemy and for the orderly liquidation (italics added. - К.М.) of Lend-Lease supply arrangements upon the termination of hostilities». This aide-memoir also suggests continuation of supplies on certain terms of repayment (italics added. - K.M.). Article 2 of the proposed agreement reads:

«Within such periods as may be authorized by law, the Government of the United States undertakes to transfer to the Government of the Union of Soviet Socialist Republics, after a determination by the President of the United States that active military operations against the common enemy have ceased, and the Government of the Union of Soviet Socialist Republics undertakes to accept, those supplies… which the Government of the United States shall have agreed to make available in order to provide war aid to the Government of the Union of Soviet Socialist Republics and, prior to the said determination of the President, shall have contracted for or shall have an inventory.

<…> The Government of the Union of Soviet Socialist Republics undertakes to pay the Government of the United States in dollars the cost of the supplies transferred under the provisions of this Article» Aide-Memoir from Acheson to Gromyko transferred on May 24, 1944 // AVPRF. F. 6. Op. 6. P. 46. D. 624. L. 13, 16..

It should be especially noted that this document was drawn up a month after the signing of the Fourth Protocol on Lend-Lease supplies, so that it could not be attributed to it in any way, and in view of the obvious unconditional victory of the Allies in the war against the Axis.

In addition, there is evidence that during 1944, Mikhail Stepanov, the Deputy People's Commissar for Foreign Affairs, actively participated in the Soviet-American negotiations on the development of principles for the organization of post-war supplies of American equipment and materials in the U.S.S.R. and was also kept thoroughly advised of the matter Memorandum of Conversation by the First Secretary of Embassy in the Soviet Union (Page). June 11, 1945 // FRUS. 1945. Vol. V. P 1019-1020..

The Soviet and American sides didn't see eye to eye on the events that immediately followed the publication of the May 12 note. The U.S.S.R. Embassy in Washington learned of the termination of deliveries from its sales representatives in the port even before receiving an official message from the State Department. Novikov immediately called Grew, who stated that he had no knowledge of ships being turned around and advised the former to address the same question to Assistant Secretary Clayton Herring G. C., Jr. Aid to Russia... P 205.. According to the Chairman of the Government Purchasing Commission of the Soviet Union in the U.S.A. General Rudenko, «as a result of our measures and negotiations with representatives of U.S. government bodies, these decisions were canceled the same day, on May 12, and the Americans were instructed that steamships being loaded in the East Coast ports should continue the loading, and the ships on the way must proceed to the ports of the U.S.S.R.» Iz otcheta predsedatelia Pravitel'stvennoi zakupochnoi komissii v SShA general-leitenanta L. G. Rudenko o rabote komissii za 1945 g. 5 marta 1946 g. // RGAE. F. 413. Op. 12. D. 9870. L. 3-10.

It is mistakenly believed in the national historiography that the first talks on the further settlement of Lend-Lease after the conclusion of 1945 agreement between the U.S.S.R. and the U.S.A. began in 1947 Korotkov G. I. Lend-liz: mify i real'nost' // SShA: ekonomika, politika, ideologiia. 1985. N 6. P 52.. In fact, this question had never come off the agenda of the Soviet-American negotiations. On January 4, 1946 Willard Thorp, Deputy to the Assistant Secretary of State for the Economic Affairs reminded Leonid Rudenko that the American side was still waiting for an inventory of Lend-Lease supplies in the possession of the U.S.S.R. Mr. Willard L. Thorp, Deputy to the Assistant Secretary of State for Economic Affairs, to the Chair-man of the Government Purchasing Commission of the Soviet Union in the U. S. A. (Rudenko). January 4, 1946 // FRUS. 1946. Vol. VI. P 818-819.

As in the case of a number of other important issues of bilateral economic cooperation, which called for Moscow's rapid reaction in late 1945, the decision to grant such an inventory was delayed. It might be explained by at least two reasons. First, according to the testimony of a number of Soviet officials and Stalin's daughter Svetlana Allilue - va, in October-December 1945, Joseph Stalin suffered a serious illness - a stroke or a TIA Allilueva S. Dvadtsat` pisem k drugu. Moscow, 1989. P 20-21.. He recuperated from the consequences of this illness at his dacha in Abkhazia until mid-December 1945, and therefore could not be fully aware of the developments of the international situation. We also believe that the members of the Politburo informed him of a limited number of burning issues, such as the settlement of the Japanese and Iranian problems, the situation around Korea, etc.

Secondly, the Soviet leadership did not want to take any fundamental steps regarding the international economic cooperation until the terms of the post-war loan were agreed with the American side. In this regard, the financial agreement between the United States and Great Britain on December 6, 1945, became «fatal» for Moscow. Great Britain managed to profitably «sell» cooperation with the U.S.A. within the framework of the Bret - ton Woods institutions and with respect to the principles of drafting the Charter of the International Trade Organization Financial Agreement between the Government of the United States and the United Kingdom dated 6th December, 1945. London, 1945.. The Soviet government mistakenly believed that its support would be of a similar fundamental nature for Washington, and, for its part, was also preparing to sell it profitably This supposition is proved by: Herring G. C., Jr. Aid to Russia... P. 250.. Meanwhile, by the end of 1945, the U.S. leadership not only decided to categorically change the approach to negotiations with the U.S.S.R., abandoning any concessions It is more than appropriate here to recall a widely known comment made by Truman in early Jan-uary, 1946: “I'm tired of babying the Soviets” // The Truman Administration. A Documentary History / eds B. J. Bernstein, A. J. Matusow. New York, 1966. P. 197-198., but also began to develop a rather indifferent attitude to the prospects of participation or non-participation of the Soviet Union in the creation of post-war trade and economic institutions. In addition, back in January 1945, when the question of granting Moscow a large credit was actively and sympathetically discussed in Washington, a Chief of the Financial and Monetary Affairs Department, Emilio Collado, informed the State Department that according to their estimations, Russia could reattain the pre-war level of capital investment by 1948 with no foreign loans and only limited use of its gold reserves and production, plus reparations deliveries Memorandum by the Chief ofthe Division of Financial and Monetary Affairs (Collado). January 4, 1945 // FRUS. 1945. Vol. V. P. 939.. Thus, seeing no urgent need to help the Soviet economy, which in a few years was to return to the pre-war level, the U.S. administration did not consider it necessary to fight the Congress See: Memorandum by Mr. George F. Luthringer of the Office of Financial and Development Policy to the Assistant Secretary of State for Economic Affairs (Clayton). May 23, 1946 // FRUS. 1946. Vol. VI. P. 842-843. for granting the U.S.S.R. a loan on more favorable terms than those that were offered to other Allies Financial Agreement between the Government of the United States and the United Kingdom. P. 2.. These sentiments were further strengthened with Truman coming to power: he even preferred to «forget» about the application for a loan formally submitted by the Soviet Union See: Herring G. C., Jr. Aid to Russia. P. 255-256..

Finally, another factor that could also play a role in the inability / unwillingness of the Soviet side to quickly satisfy some of the U.S. requests was the false sense of its moral leadership in the world developed by Moscow in 1944-1945 on account of the huge price that the U.S.S.R. paid for the victory. It was this feeling that could lead to a deep conviction that there was no reason to hurry with resolving issues that the Soviet leadership did not regard as critically important. Moscow officials mistakenly believed that no important decisions would ever be made without the Soviet Union In particular, the directions for the Soviet delegation which was supposed to participate in the ITO Charter talks hade been finalized by the end of summer 1946, when the U. S. A. was preoccupied with a broad anti-Soviet campaign. See: Directions for the loan and other economic negotiations with the U. S. A. // Rossijski gosudarstvennij arkhiv social'noj i politicheskoj istorii (RGASPI), F. 84. Op. 1. D. 28.. As for the inventory of LendLease supplies, its compilation, in the opinion of the Soviet government, did not belong to a number of those foreign policy tasks that required an immediate solution.

The United States treated it quite differently. In a note sent by U.S. Secretary of State James Byrnes to the Soviet chargй d'affaires Fyodor Orekhov on February 21, 1946, the settlement of Lend-Lease was linked to the solution of other fundamentally important problems of a bilateral and multilateral nature. Leaving the detailed considerations of the reasons for such phrasing of this note on the sidelines of this article Minkova K. V. The Economic Roots of the Cold War: The IMF, ITO and Other Economic Issues in Post-War Soviet-American Relations // Journal of Global Initiatives. 2017. Vol. XIII, N 1. P. 18-31., we should note that the settlement of Lend-Lease was tied, in particular, to the questions of the participation of the Soviet Union in the international financial, economic and trade bodies created in 1945-1946 The Secretary of State to the Chargй of the Soviet Union (Orekhov). February 21, 1946 // FRUS. 1946. Vol. VI. P. 828-829.. The Soviet leadership understandably reacted to Byrnes's note extremely negatively. Moscow was ready to discuss the Lend-Lease settlement only in conjunction with those issues that it considered to be directly related to it, i.e. provision of credit by the United States Government to the Government of the Union of Soviet Socialist Republics, conclusion of a treaty of friendship, commerce and navigation between the Union of Soviet Socialist Republics and the United States of America and methods for giving effect to the terms of article VII of the Soviet Master Lend-Lease Agreement of June 11, 1942, i.e. participation in the talks on the Charter of International Trade Organization The Chargй of the Soviet Union (Novikov) to the Secretary of State. March 15, 1946 // Ibid. P 829-830..

On March 18, 1946 another note was sent to the Soviet Ambassador Novikov, in which it was offered to the Soviet Union in a very strict form either to return or to purchase 96 Liberty ships, tankers and cargo vessels that had been «remaining in the custody of the Soviet Union» The Secretary of State to the Chargй of the Soviet Union (Novikov). March 18, 1946 // Ibid. P 830-831..

The exchange of notes on this issue continued against the backdrop of a sluggish bargaining about the list of issues that the Soviet government was ready to discuss in conjunction with the problem of Lend-Lease settlement.

On June 13, 1946, the U.S. government designated the repayment of Lend-Lease (that is, payment for all equipment and transport that remained in the country by September 2, 1945 and not returned to the U.S.A.) as an indispensable condition for obtaining new loans for all Lend-Lease recipients Butenina N. V. Lend-Liz: sdelka veka. P 167.. This was followed by long and difficult negotiations between the United States and the U.S.S.R. on methods for estimating amortization and, accordingly, the total amount of Soviet debt.

No progress in these negotiations had been achieved until early September 1946. It made the State Department offer Moscow separate negotiations on the terms of the Lend-Lease redemption to get at least some result 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). September 3, 1946 // FRUS. 1946. Vol. VI. P 853.. The corresponding note was sent by Clayton to Orekhov on September 14, 1946 The Acting Secretary of State to the Chargй of the Soviet Union (Orekhov). September 14, 1946 // Ibid. P. 854-855.. In addition, the U.S. officials saw these negotiations as a means to return three icebreakers delivered to the U.S.S.R. on terms of Lend-Lease and subject to return to the United States after the end of hostilities, but still remaining in the U.S.S.R. at the time The Secretary of State to the Chargй of the Soviet Union (Orekhov). July 26, 1946 // Ibid. P 852..

This note remained unanswered, and on October 31, 1946, the State Department sent to the Soviet embassy in the United States an aide-memoir, repeating its text word-for - word The Department of State to the Embassy of the Soviet Union. October 31, 1946 // Ibid. P. 855-856.. On December 3, Clayton informed Byrnes that the American proposals for the immediate initiation of Lend-Lease settlement remained unanswered Memorandum by the Under-Secretary of State for Economic Affairs (Clayton) to the Secretary of State. December 3, 1946 // Ibid. P. 858-859.. The situation did not change by the end of December, as Byrnes communicated to the U.S. Ambassador to the U.S.S.R. William B. Smith The Secretary of State to the Ambassador in the Soviet Union. December 23, 1946 // Ibid. P. 860-861.. It seems that apart from purely political considerations, Moscow had two other reasons to persistently ignore Washington's proposals. First, at the end of 1946, the Soviet and American sides still did not see eye to eye on the sum that the Soviet Union was supposed to pay the United States. The Soviet leadership probably needed time to collect relevant data and challenge the U.S. claims. In addition, by the end of the summer of 1946 directives were prepared for the Soviet delegation with reference to the February 21 note on the comprehensive solution of economic problems between the parties Directions for the loan and other economic negotiations with the U. S. A // RGASPI. F. 84. Op. 1.

D. 28.. In these directives, the issue of getting the loan occupies the top position while other questions are «tied» to it, ranked in priority order. Thus, the detailed instructions on settlement for supplies and redemption of American ships contained several options, depending on the outcome of the loan negotiations. The second priority, a treaty of friendship and navigation, was to be concluded in the case of a favorable outcome etc. Therefore, the directives represented a certain algorithm with a sequence of iterations which could not be violated. Since the bureaucratic machine that developed such directions was extremely slow during the period under review, a rapid adaptation to the new situation and the prompt resolution of a new task was completely unimaginable.

Only on April 5, 1947, an urgent secret telegram from Smith notified Byrnes of the readiness of the Soviet side to immediately begin negotiations on settlement of accounts. On April 15, during a personal meeting with Stalin in Moscow, the new U.S. Secretary of State George Marshall asked him about the reasons for the reluctance to begin talks on Lend-Lease. Stalin referred to occasional sloppiness of the Soviet government coming from its daily routine of solving more important issues arising from the great losses in the war. Immediately after that, Stalin raised the question of a loan, to which Moscow didn't receive any response from Washington for more than two years Memorandum of Conversation between Stalin and Marshall. April 15, 1947 // FRUS, 1947. Vol. II. P. 341.. That meeting did not result in anything more constructive than the exchange of mutual accusations of negligence.

The day before the conversation between Marshall and Stalin, the Central Committee of the All-Union Communist Party of the Bolsheviks approved of the Directives on the settlement of Lend-Lease Postanovlenie TsK VKP(b) ob utverzhdenii prilagaemogo proekta otveta pravitel'stvu SShA po voprosu o lend-lize. 18 noiabria 1947 // RGASPI. F. 17. Op. 166. D. 788. L. 68; D. 791. L. 76-79.. They implied payments to the American side for goods, materials and equipment supplied to the U.S.S.R. with very substantial amortization. The talks began on April 30, 1947, in Washington. The Soviet side was represented by the Soviet ambassador in the U.S. Nikolay Novikov and the head of the Department of the Ministry of Foreign Affairs, Amazasp Arutiunian United States Side Minutes of First Combined Meeting on Lend-Lease Settlement Negotiations. April 30, 1947 // FRUS. 1947. Vol. IV P. 680-683.. By mid-July, no tangible progress had been achieved at the talks.

On June 25, 1947, a list of all American proposals for Lend-Lease settlement was sent to Novikov Outline ofthe Main Points of Settlement Proposed by the United States Side. June 25, 1947 // FRUS. 1947. Vol. II. P 696-702.. It is noteworthy that this list contained neither any indication of the exact amount that the Soviet Union was supposed to pay to the U.S., nor the methodology for calculating it.

The answer to these proposals was approved by the decision of the Central Committee of the All-Union Communist Party of the Bolsheviks as late as on November 18, 1947 RGASPI. F. 17. Op. 166. D. 791. L. 76-79.. However, since it also lacked any specific figures, by late 1947 the Lend-Lease negotiations still remained far from completion.

In conclusion, it is to be stressed again that the May 12, 1945 note on the cessation of Lend-Lease supplies to the U.S.S.R. was not directed solely against the Soviet Union and did not appear completely unexpected for the Soviet leadership. At the same time, the U.S. administration (not only Harry Truman and his team by their actions, but also F.D. Roosevelt and his associates with their inaction) provoked the first serious conflict with Moscow during the war period. This conflict has undoubtedly left its imprint on all the subsequent negotiations between the United States and the Soviet Union. In addition, the national historiography makes virtually no connection between the settlement of Lend-Lease, the provision of the U.S. loan to the U.S.S.R., and the participation of the Soviet Union in the development and activity of post-war trade and economic institutions. Meanwhile, this connection is more important as it unquestionably determined those events in the Soviet-American economic sphere that eventually led to the beginning of the «Cold war».

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