800.51W89 U.S.S.R./68: Telegram
The Ambassador in the Soviet Union (Bullitt) to the Secretary of State
[Received June 9—3:50 p.m.]
132. Your 108, June 6, 4 p.m., and 112, June 8, 5 p.m., and my 124, June 8, noon. In the course of a long conversation this afternoon Krestinsky repeated the views reported in my 85, May 16, 10 p.m.
He asserted that his Government had accepted Litvinov’s verbal agreement with the President only with the greatest reluctance, that Litvinov had made a further great concession to me by agreeing to accept credits instead of a loan, that his Government would make no [Page 105] further concession but would prefer to let the entire matter drop. I replied that Litvinov had not yet offered to carry out his promises as the President and I had understood them. I added that I felt it would be fruitless for me to continue discussions in Moscow as my Government had indicated to me decisively that his proposal of May 16 was totally unacceptable (your 84 May 18, 3 p.m.).
I went on to say that I felt personally that the cooperation of our countries in world affairs was most desirable and that a complete failure of the negotiations would have a deplorable effect. I suggested, as a purely personal view, that there might be a faint chance to make progress if Troyanovsky were to approach the Department with a specific proposal for the purchase of certain definite American commodities or goods at certain prices, on certain credit terms which would include payment of indebtedness. Krestinsky was paradoxical in his reply saying that Troyanovsky would doubtless run up against the same difficulty that confronted us in Moscow. Nevertheless, I derived the impression that he would probably advise Troyanovsky to approach the Department with specific proposals. He informed me that Litvinov would be in Moscow in about a week and I believe that instructions to Troyanovsky might well be delayed until Litvinov’s return.
I think the Department should await a proposal from Troyanovsky.
If Troyanovsky should not initiate conversations it will be because the Soviet Government is indeed adamant. In that case I believe we should await a turn in world events which might make the Soviet Government more malleable.