611.6131/518: Telegram
The Chargé in the Soviet Union (Kirk) to the Secretary of State
[Received August 3—7:23 p.m.]
222. Following a prolonged discussion at the Foreign Office this afternoon in which all the arguments set forth at various times by the Department were rehearsed and the special observations set forth in the Department’s above-mentioned telegram27 were presented, Mr. Weinberg made the categorical statement that the Soviet Government was ready to renew the commercial agreement on the same basis as the current accord but that it was his firm opinion that if the Government of the United States should insist upon an increase in the minimum guarantee of purchases, the renewal of the agreement would be impossible. His argument, briefly stated, amounted to an assertion that the basis of the policy of the Soviet Government in its relations with other governments was the system of granting concessions only upon the receipt of a corresponding quid pro quo, that an increase of the minimum guarantee of purchases represented a concession on the part of the Soviet Government, that the generalization of benefits accruing under the trade agreement policy of the United States had already been granted to the Soviet Union by virtue of the extension of unconditional most-favored-nation treatment in the present agreement and that consequently the actual and increasing advantages to Soviet trade agreements already negotiated or in form of negotiation could not be regarded as quid pro quo for a present increase in the minimum guarantee. He was unwilling to admit the contention that such an increase was merely a partial declaration of an actual fact in that the scale of Soviet purchases from the United States were actually exceeding largely the amount of increase of 10 million or even less which would be acceptable to the United States and stressed the fact that such a guarantee was a charge in that it did in fact bind the Soviet Government to a definite sum which it would be constrained to maintain. He also refused to consider the argument that Soviet trade had benefited largely during the past year and would benefit to a [Page 617] greater extent in the future by virtue of the fact that the United States trade agreement policy extended to the Soviet Union most-favored-nation treatment which it was pointed out had been granted for 1 year [and] would lapse on the failure to renew the present agreement with the consequent damage to Soviet trade. Furthermore he would not agree that the expressed willingness on the part of the United States Government to explore the possibility of enlarging the commerce between the two countries as [was?] a concrete compensation for an increased guarantee.
I informed Weinberg that my instructions were to renew the present agreement provided an increase of the minimum purchases should be guaranteed and that although I took note of his statements I felt that in view of the importance of the matter it was incumbent upon me to ask that I receive an expression of the views of Litvinov himself after a consideration by him of all the arguments and considerations involved and on the basis of the larger aspects of policy affecting the two countries. Mr. Weinberg said that he would consult the Commissar as soon as possible but that he did not expect to be able to reach him before noon tomorrow and added that he had every reason to believe that Mr. Litvinov would merely confirm the decision stated above. I left with Mr. Weinberg an informal memo[randum] embodying the contents of the Department’s 120 omitting that portion of paragraph 2 beginning “in view of” and ending “50 million.” Mr. Weinberg in concluding stated that his Government would view with deep regret a failure to renew the present agreement but maintained that in his opinion a consent to increase the guarantee of purchases could not be given and clearly indicated that if the agreement failed of renewal owing to an insistence on that point his Government could not consider that it was responsible for that failure.
I shall of course telegraph the Department immediately upon receipt of further word from the Foreign Office but in view of the extreme urgency of the matter I shall appreciate receiving the Department’s final views on this point in controversy in the event that it is inclined to communicate them to me in advance.
- Reference is doubtless intended to the Department’s telegram No. 120, August 2, 1938, 6 p.m., supra. ↩