FOREIGN RELATIONS: Bad Debt

At Camp David last September, Nikita Khrushchev’s complaints to President Eisenhower about restrictions on U.S.Soviet trade drew a polite but pointed reminder that the U.S. might do more business if the Kremlin paid its bills. On the U.S. Treasury books since 1945: Soviet debt for lend-lease goods usable in peacetime, originally set at $2.6 billion but later reduced to $800 million (of total wartime U.S. aid worth $10.8 billion). Last Soviet offer, made by hard-haggling Stalin in 1951: $300 million. Asked if he wished to reopen negotiations, Khrushchev beamed: “Of course, we’d be glad to.”

But in talks begun last month, Soviet Ambassador Mikhail A. (“Smiling Mike”) Menshikov showed no Camp David openhandedness, demanded that trade be discussed along with the debt. U.S. Negotiator Charles E. Bohlen, longtime (1950-57) U.S. Ambassador to Moscow and now Special Assistant to Secretary of State Herter, patiently explained that trade bans were largely Congress’ affair, and what about the lend-lease bill? Last week, his patience worn thin after four fruitless sessions, “Chip” Bohlen broke off the talks, marking the third U.S. failure since 1947 to get a pennies-on-the-dollar settlement of a bad debt.