S-2152, COMMENTS ON CONG. JAMES HARVEY (MICHIGAN) LETTER TO THE DCI RE 'PROPOSED $60 MILLION US EXPORT-IMPORT BANK LOAN FOR MACHINE TOOLS TO BE USED IN A NEW AUTOMOBILE PLANT IN THE SOVIET UNION'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70S00385R000200030114-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: December 15, 2016
• Document Release Date: October 7, 2003
• Sequence Number: 114
• Publication Date: January 26, 1967
• Content Type: MFR

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26 January 1967
MEMORANDUM FOR THE RECORD
SUBJECT: 3-2152, Comments on Cong. James Harvey (Michigan) Letter
to the DCI re "Proposed $60 Million US Export-Import
Bank Loan for Machine Tools to be Used in a New
Automobile Plant in the Soviet Union"
D/ORR hand-carried the attached Memo for the Record to Mr. John
Warner, Legislative Counsel, today.
Re para. 2.a. I told him that this decision came out of the SIG
meeting of the same date and that I doubt CIA took a policy position
as the Rusk memorandum indicated, although I am not aware of the
Director's practice in these matters.
Re para. 2.b. I indicated that we did not yet know the precise
equipment involved and that in any case a final decision on the
licensing of whatever equipment is ordered would not be made until
the license application has been made to Commerce.
Re para. 2.c. in response to John Warner's question, I said
that if the United States did not get this contract it would be
picked up by a Western European manufacturer.
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I N. T ORELL, a.
Direc or
Research and Reports
{ v.? , . _ ,;`c CRC, 10/06/2003
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sr~
Attached are our jers to C=g. H
`a
Questj0 In Pa. 2.b. and 2.e. I ,
to our rs In 2.c. that if the United
States did .not get this oontr ct it is
that it would be Pioled up by ao stern
European q t r.
Attachment:
2.b. and 2.c.
excerpted from
attached paper,
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 Approved For Release 2003/10/21 : CIA-RDP70SO0385R000200030114-1
FORM NO. 101 REPLACES FORM 10.101
1 AUG 54 WHICH MAY BE USED.
STAT
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a (" ~1) yt r,"~ - " _ - -, ON
25 January 1967
MEt+IORA1 1M FOR THE RECOEI:
1. Congressman James Harvey (Michigan) wrote to the ZQ1 on 20
January 1967 regarding "the proposed $60 million United States Export-
Import Bank loan for machine tools to be used in a new automobile plant
in the Soviet Union."
2. Congressman Harvey asked for comments on three specific
questions. Those questions and ORR comments are as follow:
a. "Do you approve of this proposal?"
Comment: The Agency would presumably not take a position
on this question. t should be noted, however, that the Secretary of
State, in a memorandum to the President dated 22 June 1966, stated that
"the senior levels of the Department of State, DOD, CIA, Commerce,
Treasury, and the Export-Import Bank have agreed unanimously that ...
the Export-Import Bank should go ahead with the loan" and that the
President should "informally notify Congress."
b. "Is there any possibility that the machine tools could be
converted in any fashion to help or to produce war material or weapons
of any sort?"
Cement: The special purpose tools likely to be exported
by the U.S. to eequip the FAT plant in the USSR could not be used
directly to make military equipment such as tanks and similar items.
The U.S. tools could be converted to the manufacture of minor military
items such as jeeps, but only at great cost and with considerable
difficulty. It would be much more economical for the USSR to use its
own machine tools for producing military equipment. Although some of
the automobiles produced in the plant could be allocated to the military
for use as staff cars and for similar purposes, the Soviets are able to
meet military requirements from their present automobile plants. Nev
technology would be embodied in the U.S. exports, but the Soviets could
acquire this technology almost as easily by purchasing machine tools
from European licensees of U. S. manufacturers and by utilizing readily
available technical data.
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'JAMES HARVEY
STH DISTRICT. MICHIGAN
COMMITTEES,
BANKING AND CURRENCY
INTERSTATE AND FOREIGN COMMERCE
.i 0
DISTRICT OFFICES:
JEFFERSON-BAUM COURT
SAOINAW, MICHIGAN
753-6585
(Cougm;.e; of the Uniteb States;
Sousse of 3aepreantatibeo
Wasbffigton, J.C. 20515
January 20, 1967
Honorable Richard Helms
Director
Central Intelligence Agency
Washington, D. C. 20505
I am taking the liberty of writing to you for an
official response on the proposed $60 million United States
Export-Import Bank loan for machine tools to be used in a
new automobile plant in the Soviet Union.
409 FORT
PORT HURON. MICHIGAN
982-0591
As one of the four Members of Congress who recently
visited Italy and a number of communist European countries, I
believe I have all the necessary general details on this
proposal. However, at this time I would greatly appreciate
your comments on the following questions:
1. Do you approve of this proposal?
2. Is there any possibility that the machine
tools could be converted in any fashion to
help or to produce war material or weapons
of any sort?
3. If the United States does not participate in
this transaction, is it likely other sources
of financial assistance can be utilized?
Thank you for your interest and cooperation in this
matter. With kindest regards,
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UNCLASSIFIED znr r.
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CENTRAL INTELLIGENCE AGENCY
OFFICIAL ROUTING SLIP
TO
NAME AND ADDRESS
DATE
INITIALS
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DIRECT REPLY
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SIGNATURE
Remarks :
S-2152 Reply to Congressman Harvey.
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FOLD HERE TO RETURN TO SENDER
FROM: NAME, ADDRESS AND PHONE NO.
DATE
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F 2-6 10. n3 7 Use previous editions
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UNCLASSIFIED i, rn w7w rrA r
CENTRAL INTELLIGENCE AGENCY
OFFICIAL ROUTING SLIP
Mr. William Morell
4 F 18 Hqs
STAT
Will you please call me
as soon as you have had a chance to
look this over.
o
hn Warner
R
r: r
Legislative Counsel 7 D 01