611.6131/381

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

No. 1549

Sir: I have the honor to attach hereto a memorandum48 setting forth the substance of a conversation which took place on April 20, 1936, between Mr. Henderson, Second Secretary of the Embassy, and Mr. Rosenblum, Chief of the Economic Section of the People’s Commissariat for Foreign Affairs of the U.S.S.R., regarding American-Soviet trade relations.

It is apparent from the remarks made by Mr. Rosenblum that the Soviet Government is preparing, when the question of the renewal of the provisional trade agreement effected by the exchange of notes last July arises, again to insist that steps be taken to bring about a cessation of the import duties imposed in the United States upon Soviet coal.49 Several months ago the Assistant Chief of the Foreign Trade Policies Division of the People’s Commissariat for Foreign Trade50 informed Mr. Henderson that that Commissariat would not have approved the drafts of the notes exchanged last July if it had understood that they did not provide for the extension of full most-favored-nation treatment to Soviet coal. Since that Commissariat is frequently willing to sacrifice immediate trade opportunities rather than to submit to any treatment which it considers as discriminating, there is a likelihood that the duty on coal may prove a serious obstacle to the renewal of the agreement in question.

It will be observed from an examination of the table attached hereto as enclosure No. 248 that during the eight months period ending February 29, 1936,* the Soviet Government imported from the United States merchandise to the value of 23,561,000 rubles or $20,734,000, whereas during the same period in 1934–1935 such imports amounted to 12,404,000 rubles or $10,915,520, and during the entire twelve month period ending June 30, 1935, they amounted to 23,239,000 rubles or $20,450,400. If Soviet imports from the United States during the last four months of the year ending in July, 1936, do not reach a level higher than that attained during the preceding eight months, such imports will not greatly exceed the [$]30,000,000 mark established.

According to information obtained from foreign sources in close [Page 325] contact with Soviet manufacturing organizations, the Soviet Government was planning last summer to purchase in the United States equipment for automobile manufacturing plants of a value of approximately $21,000,000, but on account of its increased fear of war it decided during the winter to postpone such purchases, and either to turn over the gold or gold equivalents available for such purchases to its war chest or to use them in purchasing materials, which would be more immediately useful in case of war. If this information is accurate, Soviet purchases in the United States, according to these informants, will be less by several million dollars during the year ending June 30, 1936, than had been anticipated.

Respectfully yours,

William C. Bullitt
  1. Not printed.
  2. Duty was levied at the rate of 10 cents per 100 pounds in accordance with section 601 (c) (5) of the Revenue Act of 1932 (47 Stat. 169, 259).
  3. A. N. Kaminsky.
  4. Not printed.
  5. Later Soviet statistics are not available. [Footnote in the original.]