611.6131/448: Telegram
The Ambassador in the Soviet Union (Davies) to the Secretary of State
[Received July 9—9:20 p.m.]
161. From conference today with Foreign Office officials we obtained the following impressions:
- 1.
- They will put up a strong stand for bilateral character of most-favored-nation provision and may possibly reject agreement rather than yield on this point. They demand explanations of our refusal to accept provision from which we stand nothing to lose.
- 2.
- They object to promising $40,000,000 purchases and claim that it will be particularly difficult to induce the Soviet Government to grant this point in view of our attitude regarding rebates. We feel, however, that they may yield in the end if they receive satisfaction on most-favored-nation provision and other minor points. In any case they would probably be willing to agree to more than the $30,000,000 on which they are still insisting.
- 3.
- They claim no decision yet taken on limitation coal exports to 400,000 tons but will almost undoubtedly yield on this point if agreement is reached in other requests.
- 4.
- They would like a face-saving formula of termination clause which would permit them to abrogate agreement after lapse of 6 [Page 418] months or thereabouts after signature in case they should be required to pay coal tax.
- 5.
- Reference paragraph 4, section 2 of Department’s telegram.72 They would prefer introductory phrase as in American-French agreement immediately preceding list of safeguards but are not concerned as to actual items on list. Thus quotas need not be mentioned.
- 6.
- They would like press release about limitation of coal export to contain approximately same phraseology as letter, i. e. to indicate intention on their part rather than outright promise.
Does the Department desire that we should take final position for the future as set forth in Department’s cable, risking negotiations on these points, or does it desire give us latitude here to bring matter to speedy conclusion 13th, as expressed by Department’s telegram No. 70, June 13 [23], 6 p.m., by advising us what limit of concessions we can make here. It is, of course, understood we will exhaust every effort to obtain complete acceptance categorically as set forth in Department’s cable before any concession is made. I feel that we have good chance of reaching agreement speedily if we have latitude to make concessions. Supplementary telegram follows discussing remaining minor points in the Department’s telegram which appear to contain no real difficulties.
- Telegram No. 85, July 8, 1937, 6 p.m., supra. ↩