611.6181/322: Telegram

The Ambassador in the Soviet Union ( Bullitt ) to the Secretary of State

264. Your 142, July 1, 7 p.m. I discussed with Litvinov today our draft of note. There was agreement on all points except the paragraph reading:

“It is understood that nothing in this agreement shall be construed to require the application to articles the growth, produce or manufacture of the Soviet Union of duties or exemptions from duties proclaimed pursuant to any trade agreement between the United States of America and the Republic of Cuba which has been or may hereafter be concluded.”30

I explained to Litvinov the difficulty caused by section 601 (c) (5) of the Revenue Act of 1932 and asked him to accept our language assuring him that the only reductions which have been made or are likely to be made in American tariff articles in agreements with foreign countries (Cuba excepted) are those which will be made under the authority of the Foreign Trade Agreements Act of 1934 and that the Soviet Union therefore would be assured of the benefit of all American tariff reductions made as a result of agreements with foreign countries.

Litvinov said that the Soviet Union did not desire to claim the special exemption under section 601 (c) (5) of the Revenue Act of 1932. He called in the Economic Adviser of the Soviet Foreign Office Rosenblum who stated that in addition to the special exemption under section 601 (c) (5) of the Revenue Act 1932, referred to above, the Government of the United States accorded by unilateral act special lowered tariffs on coal to countries which had trade agreements with the United States. He said that these special lowered tariffs had existed before June 12, 1934, that they still existed and that under your wording of the paragraph quoted above coal from Great Britain and various other countries would enjoy lower tariffs on entering the United States than coal from the Soviet Union.

I replied that my knowledge of our coal tariffs was insufficient for me to comment of [on] his statement but that I was certain that our Government had no desire to discriminate against the Soviet Union and that I would telegraph you immediately asking for clarification with respect to this point.

If the paragraph of our draft note quoted above can be clarified or supplemented to meet this objection I believe that we may consider [Page 207] this negotiation close to conclusion. Litvinov will be in Moscow all this week ready for action.

  1. Quotation of this passage is apparently an error. See paragraph 4, telegram No. 144, July 6, 1935, 4 p.m., to the Ambassador in the Soviet Union, infra.