RUSSIAN REQUEST FOR FINANCING OF ACQUISITIONS
OF CAPITAL EQUIPMENT DURING AND AFTER THE WAR
        
     1. The Russians have reqursted a $6 billion credit 
at 2 1/4% with amortization concluding in the thirtieth 
year to cover both immediate and true  postwar acquisitions 
of industrial equipment.
 
           2. The Department proposes to inform the Soviets 
through Ambassador Harriman that no long range indus-
trial equipment can be put into production until agree-
ment be reached on the terms of the lend-lease 3-C 
agreement which has been under discussion since May 
1944, that we desire action on the 3-C agreement before 
signing the Fourth Protocol (but we should not stand
too strongly on this point), and that consideration 
of postwar credits must be separated from the 3-C 
negottiations. The Department is now considering with 
Treasury and FEA propsed final terms.
 
          3. With respect to true posr-war credits the 
Deparment is considering with the Treasury the lending 
agency or  autority under which such credits might be 
extended; the effect of extensions of credits to Russia 
on special terms upon general operations of the Export-
Import Bank, the proposed Bretton Woods bank, and pos-
sible revival of private lending; the possibility of 
setting the Russian credit apart by some distinctive 
feature in order to avoid the establishment of restric-
tive precedents; and the amount of the credit.
 
     4. The Department believes the U.S.S.R. will 
contract only such credits as it can service. Current 
Russian gold production of about $200 million a year 
could service the $6 billion credit on the terms pro-
posed by the Soviets; about $3 billion on usual Export-
Import Bank credits.
 
    5. Postwar credits to the U.S.S.R. can serve as 
a useful instrument in our overall relations with the 
U.S .S.R.