550.E1 Russia/9b: Telegram

The Secretary of State to the Ambassador in Italy ( Child )

13. Your 56, May 16, 1 p.m., 57 May 16, 3 p.m., 58 May 17, 1 a.m.

The radical difference between proposal submitted by your 50, May 14, 1 a.m. and that submitted by your 54, May 15, 2 a.m. is apparent and there should be no misunderstanding of the position of this Government. The proposal of your 50, May 14, 1 a.m. was understood to be for a real committee of experts and its nature was emphasized by statement that committee would be “empowered to call Russians when information is desired.” To avoid any possibility of misapprehension I took care, in my tentative answer, No. 9, May 14, 11 p.m., to provide not only that committee should be wholly advisory and that separate arrangements should be barred pending report, but that committee should be constituted for expert inquiry and report as to economic situation and remedies. In later proposal submitted by your 54, May 15, 2 a.m., while the designation of a commission of experts is used, the true character of proposed plan is disclosed in Annex by provision (1) that commission should be appointed “for the further consideration outstanding differences with Russian Government and for meeting with Russian Commission similarly empowered,” and (2) “that Powers represented in non-Russian Commission and names members of commission will be communicated to the Russian Government and names members Russian Commission communicated other governments not later than June 20.”

The Genoa Conference has been so conducted as to give foremost place to question of recognition of Soviet regime and Soviet representatives have been facilitated in presenting impossible demands, as, for example, for a huge loan to Soviet regime for which there is not the slightest prospect. Further, the Soviet representatives in their memorandum of May 11th have set up barriers to political relations which might as well be recognized as such first as last. This Government has no intention of continuing such fruitless discussions or of participating in conference which merely furnishes a stage for declarations ill-adjusted to the objects sought.

There seemed to be left, however, an opportunity for a real expert investigation of Russian economic conditions relating to agriculture, industry, transportation, et cetera, by which a common understanding could be reached as to maladies and necessary economic remedies. The situation appears to this Government to be plain, but such an [Page 812] inquiry might be helpful by promoting a better understanding here and abroad of the inescapable economic facts. There would be no objection to German participation or to a Russian expert sitting on such a committee provided that it was understood that the committee was not to take up differences with Russian Government or to deal with the Soviet regime itself but was entirely for the purpose of a scientific economic inquiry and for report to the governments concerned so that political questions could be considered by such governments in their proper order and in the light of the unquestionable economic conditions revealed. It would be a condition, however, of Russian participation in such an economic committee of inquiry that the Russians should withdraw their memorandum of May 11th, as there is no prospect of doing anything with Russia while the position taken in that memorandum remains unchanged. This might as well be understood now in order to save much waste of time and effort. This position is one of sincere friendliness to the Russian people.

You may make this attitude perfectly clear. I have no objection to stating it to the British Ambassador or other ambassadors here if desired, but see no reason for using any other vehicle of communication than yourself. This Government desires to help so far as practicable, but sees no advantage in proceedings continuing negotiations which merely lead Russians either to demand or to believe that the impossible can be accomplished. The best alternative is to clear the air by a direct expert inquiry as to the fundamental facts.

Repeat above to London, Paris, Brussels merely for their information.

As it is probable that Lloyd George on his return will make a full statement in Parliament, it is important that there should be no basis for any possible claim of misunderstanding of our position.