MESSAGE TO SECRETARY KISSINGER ON PROPOSED PRESIDENTIAL LETTER TO CASEY SUPPORTING EXIM FINANCING OF (SANITIZED)

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-46-3-3-4
• Release Decision: RIPLIM
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: January 11, 2017
• Document Release Date: December 13, 2010
• Sequence Number: 3
• Publication Date: May 9, 1974
• Content Type: MEMO

It1 No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
111P
NATIONAL SECURITY COUNCT Outside the System
-ST/SENSITIVE/EYES ONLY
? MEMORANDUM FOR GENERAL COWCROFT
FROM: A. Denis Clift
ACTION
May 9, 1974
SUBJECT: Message to Secretary Kissinger on Proposed
Presidential Letter to Casey Supporting EXIM
Financing of USSR Fertilizer Deal
CLEF has asked for Secretary Kissinger's approval of the proposal
that the President write EXIM President Casey to express his support
for the USSR fertilizer deal (copy of CIEP package at Tab B).
The back channel message for your approval to Secretary Kissinger at
? Tab A would forward the text of the letter, review the pros and cons,
and recommend that the Secretary approve the letter.
Charles A. Cooper concurs.
RECOMMENDATION
That you approve the message at Tab A.
APPROVE DISAPPROVE
3 ;?/'
NSS Review Completed.
tE-GR--E44-SENSITIVE /EYES ONLY
No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
?
?5X1
No Objection to Declassification in Part 2013/10/24 : LOC-HAK-46-3-3-4
SECRET/SENSITIVE/EYES ONLY
TOFIAIL
TO:
FROM:
SUBJECT: Proposed Presidential Letter to Caseyon USSR Fertilizer
Deal
Secretary Kissinger
Brent Scowcroft .49
May 9, 1974
1. We have been asked to concur in CLEF proposal to President
that he send a letter to EXIM Bank President Casey expressing his
?
support for EXLM financing of USSR fertilizer deal. Text of proposed
letter is as follows:
QUOTE Dear Mr. Casey:
Peter Flanigan brought to my attention that portion
of your testimony before the Subcommittee on International
Trade of the House Banking and Currency Committee which
deals with the Export-Import Bank's, commitment to finance
the sale of American products which would be incorporated
into a large fertilizer complex in the Soviet Union.
Your testimony indicates that a $180 million loan from
the Bank will result in the sale of $400 million worth of American
exports for this complex, and will trigger the investment of
substantial funds and the creation of jobs in shipbuilding and
phosphate devel.prn-ent in Florida.
SECRrTi.crwcyrrut-4
ohiection to Declassification in Part 2013/10/24 LOC-HAK-46-3-3-4
No Objection to Declassification in Part 2013/10/247 LOC-HAK-46-3-3-4
?:ECI,M1112UBLEJ_M_,Y 4IP
You also indicate that as a result of this transaction two
nitrogen fertilizers (ammonia and urea) which are scarce in our
country will be acquired without a cash drain on our balance
of payments, in exchange for superphosphoric acid, a fertilizer
which we have in abundance and which would be produced in
Florida and shipped to the Soviet Union. The nitrogen fertilizers
coming to this country would be made with Soviet natural gas,
thus reducing the drain on our own natural gas reserves.
I believe that this transaction, resulting not only in trade
and balance of payments benefits for us but also contributing
to our own fertilizer and energy needs as well as to world food
needs, makes exactly the kind of contribution to the national
interest which I envisioned when I made the Determination, on
October 18, 1972, that it is in the National interest for Eximbank
to finance U.S. exports to the Soviet Union.
Sincerely,
Richard Nixon UNQUOTE
2. As you will recall, some weeks ago EXIM. was hesitant to move
ahead with the fertilizer deal in light of Congressional opposition to credits
for the USSR for fear that this transaction might jeopardize Congressional
action on the EXIM authorization bill. However, viogtesktay, Casey has A.4.41....Alti
?
Changed his position and now favors moving ahead with the transaction
ECRET/SENStTWE/EYES ONLY
Mr. nhiartinn in Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
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SECRET/SENSITIVE/EYES ONLY
in the belief that it is economically soun
3
and y?e1nth .11 ,s_%::;t.erf:loefxt.etstnstt.
. Senator Stevenson has suggested that a Presidential letter to
Casey supporting the fertilizer project and emphasizing its economic
benefits for the United States might create a better understanding in the
Congress.
4. I believe the following considerations are relevant:
PRO
-- The Presidential letter would be in keeping with Administration
support for increasing, mutually beneficial US-USSR trade.
-- The fertilizer deal, wh ich involves a. $180 million credit
would be the first major deal (excepting Kama River) with the USSR since
the 1972 Trade Agreement. Presidential support for the transaction will
put him on solid ground in his economic talks at the Moscow suffimit even
if the MFN issue remains unresolved.
-- It is desirable for the Administration to take action prior
to the late May meeting of the US-USSR Joint Commercial Commission
so that such action will not appear to result from Soviet pressure during
the Commission meeting.
-- There is every indication that the fertilizer deal is in the
United States' economic interests.
SECRET/SENSITIVE/EYES ONLY
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No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
aECRET/SENsITrit EYES ONLY 11,
CON
Considering the USSR credit climate in the Congress it is
questionable whether the President should involve himself personally
in the tactical maneuvering on the fertilizer deal, particularly if the
benefits for the United States should turn out to be less-than expected.
-- The economic issues aside, the President may be opened
to fresh charges from the anti-detenters and those who are urging
postponement of the Moscow summit that he is pushing ahead with
moves with the summit in mind merely to please the Soviets, moves
that may not be in the thrit-cel-R-a-tre-sAbest interests 144.
a a a
(;t1;:_c-*ejscp,a, C`41-14VJAWA41? cn.+\?,(E-Y/PA +VIA
5* A , I rec rnrnend going ahead with the Presidential
letter to Casey. The time factor is very tight; EXIM's preliminary credit
will expire on May 14. If you agree, I will advise the President that you
approve going ahead with the letter to Casey.
APPROVE DISAPPROVE
SECRET/SENSITIVE/EYES ONLY
No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
Aftl V%Id" I V E1 kt-r r ht ik -Fs rod A I ef^t-tAle?skA lf Dint tel."
No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
WASIIINGTON, Ll.G. ZUSIN W:
MEMORANDUM FOR:
THE PRESIDENT
?
FROM: DEANE R. HINTOU4 ACTING EXEC. DIRECTOR
SUBJECT: Approval of Eximbank Credit for the
Soviet Fertilizer Project
I believe it is important to move now on approval of the
Export-Import Bank credit for the large chemical fertiliz-
er project with the Soviet Union. I understand you
recently expressed your interest in moving ahead with
this project to Secretary Dent, who also believes that
we should take action now. The time factor is becoming
increasingly important, since the Eximbank's preliminary
commitment for the $180 million credit will expire on
May 14.
As you know, we face a potential problem on this matter
with the Congress, which has expressed considerable
opposition to the extension of further Eximbank credits
to the USSR. Most of this opposition, however, has been
in connection with projects for the development of Soviet
energy resources, such as Siberian natural gas. The fer-
tilizer project, on the other hand, is clearly in our
national economic interest for reasons of trade and bal-
ance of payments, employment, and meeting our fertilizer
and energy needs. To help create a better understanding
in the Congress of the economic benefits of the fertilizer
project, Senator Stevenson has suggested that you express
your support for it in a letter to Eximbank Chairman
Casey, emphasizing the project's economic advantages and
-contribution to the national interest.
No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
???
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,
?
A letter from you to Chairman Casey is attached for
your signature at Tab A. Mr. Casey's recent testimony
before the subcommittee on International Trade of the
House Banking and Currency Committee, in which he points
out the economic benefits of the fertilizer project
(indicated at page 29), is attached at Tab B.
Attachments:
As stated
No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
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No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4
THE WHITE HOUSE
WASHINGTON
The Honorable William J. Casey
Chairman
Export-Import Bank of the United States
811 Vermont Avenue, N. W.
Washington, D. C.
Dear Mr. Casey:
Peter Flanigan brought to my attention that portion of
your testimony before the Subcommittee on International .
Trade of the House Banking and Currency Committee which
deals with the 'Export-Import Bank's commitment to finance
the sale of American products which would be incorporated
into a large fertilizer complex in the Soviet Union.
Your testimony indicates that a $180 million loan from
the Bank will result in the sale of $400 million worth
of American exports for this complex, and will trigger
-the investment of substantial funds and the creation of
jobs in shipbuilding and phosphate development in Florida.
You also indicate that as a result of this transaction
two nitrogen fertilizers (ammonia and urea)- which are
scarce in our country will be acquired without a cash
drain on our balance of payments, in exchange for super-
phosphoric acid, a fertilizer which we have in abundance
and which would be produced in Florida and shipped to the
Soviet Union. The nitrogen fertilizers coming to this
country would be made with Soviet natural gas, thus re-
ducing the drain on our own natural. gas reserves.
? I believe that this transaction, resulting not only in
trade and balance of payments benefits for us but also
contributing to our own fertilizer and energy needs as
well as to world food needs, makes exactly the kind of
contribution to the national interest which I envisioned
when I made the Determination, on October 18, 1972, that
it is in the National interest for Eximbank to finance
U.S. exports to the Soviet Union.
Sincerely,
???
No Objection to Declassification in Part 2013/10/24: LOC-HAK-46-3-3-4