611.6131/471: Telegram
The Secretary of State to the Chargé in the Soviet Union (Henderson)
120. Your 202, July 31, 5 p.m. The Department desires to commend the excellent work of the Embassy in reaching an agreement on so satisfactory a basis.
The full text of notes A and B, as given in your telegram under reference, are approved with the following minor additions and corrections.
(1) In the fourth paragraph of section 1 after the words “any third country” add “or consigned to the territory of any third country” and in the same paragraph, next line, after the words “originating in” add “or consigned to”. These additions are desirable in view of the inclusion of the exportation clause and since they are to the advantage of the Soviet Government there should be no objection to their inclusion.
[Page 438](2) In the seventh paragraph, second line, undoubtedly due to a garble in transmission, the word “advance” appears. It should, of course, be “adoption”.
(3) In the same paragraph in the sentence referring to the Neutrality Act, the word section should begin with a capital S and the numeral 2 should appear without parenthesis followed by a small b in parenthesis so as to read “Section 2 (b)”. In the same sentence substitute “title to goods” for “title of goods”.
The enumerations in the eighth paragraph of section 1 should be indicated by numbers and not written out. In signing note A, the Ambassador should sign as “Ambassador Extraordinary and Plenipotentiary of the United States of America” as this title will appear in the President’s Proclamation. The text of notes C, D, E and F are approved without change.
The dates suggested in paragraph 2 of section 1 of your telegram under reference are approved by the Department, that is, the signature of the agreement on August 4 with Proclamation by the President and approval by the Soviet of People’s Commissars on August 6. The dates to appear on the supplementary notes are also approved. It is assumed that all the necessary arrangements have been made to have approval by the Soviet of People’s Commissars on August 6 as this approval must be on same date as the Proclamation.
Your 204, July 31, 8 [7] P.M. To coincide with the Proclamation, the Department proposes to release the statement to the press at 10 A.M. Washington time (5 p.m. Moscow time) August 6, if this hour is agreeable to the Soviet Foreign Office. In view of the fact that the press release here will not be issued until 2 days after the signature of the agreement, the Department is most anxious that no publicity be given to the agreement in this interval.
With reference to the statement to be made by the Ambassador to the American correspondents in Moscow on August 6, it is preferred that he follow the same procedure adopted last year, as indicated in paragraph 1 of Department’s No. 99, of July 10, 1936, 5 P.M.81 and rather than give out a prepared statement that he supply the American journalists with the following pertinent data:
- (a)
- The Soviet Government has informed the American Government that the Soviet economic organizations intend to purchase during the next 12 months American goods to the value of at least $40,000,000. This is an increase of 33⅓ percent over the $30,000,000 which was the intended annual amount of such purchases under the previous agreement of July 13, 1935,82 and an increase of 233⅓ percent over the $12,000,000 which was the average annual value of American products exported to the Soviet Union in the 3 calendar years, from 1932 to [Page 439] 1934, inclusive, preceding the agreement of July 13, 1935. It may be noted in this connection that the value of American products actually purchased by the Soviet Union under the previous agreement substantially exceeded the value of its intended purchases, amounting in each of the 2 agreement years to more than $37,000,000.
- (b)
- As shown by American customs returns, the value of the imports into the United States from the Soviet Union during the 11 months ending May 31, 1937, amounted to $21,186,265, as compared to $20,701,652 for the entire first year of the previous agreement. This is 150 [sic] percent and 168 [sic] percent of the imports in the pre-agreement years ending June 30, 1935, and June 30, 1934, respectively. The value of the imports in those years was $14,000,000 and $12,500,000, respectively.
- (c)
- The United States undertakes in the new agreement to extend unconditional most-favored-nation treatment to the commerce of the Soviet Union. This means, of course, that the Soviet Union will continue to receive the benefits of the duties proclaimed by the President of the United States pursuant to trade agreements entered into under the authority of the Trade Agreements Act of June 12, 1934.
- (d)
- You may express your gratification with the increase in the trade between the United States and the Soviet Union which has taken place during the 2 years of the previous agreement and the hope that the new agreement will result in further marked development in the trade between the two countries.
- (e)
- It should be pointed out, incidentally, to the American journalists that the new agreement, like the previous one, is not a trade agreement entered into under the authority of the Trade Agreements Act of June 12, 1934, but that it is one of many executive agreements pertaining to international commercial relations entered into under the authority of the President.