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

761.00/4–350: Telegram

The Ambassador in the Soviet Union (Kirk) to the Secretary of State ¹

confidential

Moscow, April 3, 1950—9 a. m.

1019. Soviet proclivity towards monotonously reiterated dichotomy in international economic realm might, we think, be turned to our advantage by forming basis fresh approach on lend-lease settlement.

Virtually every issue of Pravda publishes claims to Soviet economic advances contrasting with Western moribundity. March 1 price decreases and concomitant “appreciation” ruble according Soviet propaganda claims were made possible by improved economic position USSR.² Ruble now based gold in preference “less stable” dollar. By same token, Politburo members in recent campaign speeches (see inter alia Embtel 821, March 11³) made much of “concrete evidence” demonstrating upsurge Soviet economy compared capitalistic nations. Good quote supplied by Leontiev in Pravda (Embtel 970, March 28³) dealing with possibility peaceful coexistence two systems: “having conquered in single combat Fascist aggressors Soviet Union quickly reestablished its economy and is confidently proceeding along path new mighty upsurge its forces. Never has Soviet Union been so mighty and strong as at present”.

Pertinent to inquire of Soviets why, if their economy now so strong, they cannot repay promptly debt incurred in course their “singlehanded” victory World War II. Such inquiry might well be made officially of Soviet Ambassador Washington and have particular reference still unsettled lend-lease account. As an ironic aside, it could be pointed out that Soviet indebtedness, formerly representing equivalent 5.3 billion rubles, at one quick stroke of pen reduced by 1.3 billion if Soviet claim that “purchasing power” dollar now 4 rubles is to be believed. This claim naturally flies in face all economic facts, being based in part upon untenable supposition that ruble has any international exchange value.

We harbor no illusion that this would result in swift opening Soviet billfold. Soviets will, of course, respond on usual line that it is not question Soviet inability to pay but “discrimination” as compared British settlement⁴ that makes them refuse billion dollar figure. However approach would lend itself to salutary public deflation absurd Soviet claims, and would serve bring home once again fact Soviets still have not settled World War II obligation.

Kirk

1. This telegram was relayed on April 3 to London at 3:45 a. m. and to Paris at 5:00 a. m.
2. About the revaluation of the ruble, alterations in the exchange rate, and the reduction of prices, see pp. 1113 ff.
3. Not printed.
3. Not printed.
4. For documentation on the conclusion of the Financial Agreement and the Lend-Lease Settlement Agreement with the United Kingdom signed at Washington on December 6, 1945, see Foreign Relations, 1945, vol. vi, pp. 1–204. For the text of the Lend-Lease Settlement Agreement, see Department of State Treaties and Other International Acts Series (TIAS) No. 1509, or 60 Stat. (pt. 2) 1564.