The Chargé in the Soviet Union (Kirk) to the Secretary of State

No. 2103

Sir: As reported in my telegram No. 42, January 30, 9 p.m.,60 Herr Schnurre,61 the Eastern European expert of the Economic Section of the German Foreign Office, who was to have accompanied the German Ambassador62 on his return to Moscow on January 31 for the purpose [Page 315] of conducting commercial negotiations with Soviet officials, was unexpectedly recalled to Berlin for unspecified reasons.63 A member of the German Embassy here has stated in confidence that it is not believed that the postponement of Herr Schnurre’s visit indicates any change in the intention of the German Government in regard to the conclusion of an agreement with the Soviet Government for the expansion of Soviet-German trade and it is consequently expected that Herr Schnurre will come to Moscow at some later date, possibly in March. Although it is stated here that Herr Schnurre’s visit was postponed because his presence in Berlin was essential in connection with certain German-Polish commercial negotiations, it has likewise been intimated in confidence that the sudden recall of Herr Schnurre, who was stopped in Warsaw on his way to Moscow, was not unconnected with the political significance which in certain interpretations had been placed upon the possibility of a commercial agreement between Germany and the Soviet Union. These interpretations, it was believed, had aroused the anger of Hitler and other high Nazi officials and had resulted in decision to postpone negotiations with the Soviet Government until publicity had subsided.

The Commercial Counselor of the German Embassy,64 who has recently returned from Berlin, in general confirmed the information contained in my telegrams numbers 21, January 16, and 36, January 26,65 concerning the economic aspects of the proposed agreement. He stated that the Soviet trade representative in Berlin had requested that the German Government send a delegation to Moscow for the purpose of exploring the possibilities of increasing the trade between the two countries and that it had been in compliance with this request that Herr Schnurre had been delegated to come here. According to the German Commercial Counselor, Schnurre’s visit was cancelled at the last moment because his services were urgently needed in Berlin. He added that it was expected that Germany would endeavor to increase its purchases in the Soviet Union of manganese, timber, and apatite, and possibly iron ore, and would export primarily machinery, but in this connection he stated that in his opinion it was “psychologically impossible” to sell any equipment of a military nature or even machinery that would be utilized in the munitions industry. Although the German Commercial Counselor made no mention of the question of the extension of German credits to the Soviet Union, it has nevertheless been ascertained from another member of the German Embassy that, according to present information, such credits will form [Page 316] part of any commercial agreement which may be reached between the two Governments. It is pointed out, however, that by no means all of the difficulties involved in the conclusion of such an agreement have been overcome, and that the Soviet Government is still endeavoring to obtain military and semi-military equipment which, as indicated above, the German Government is unwilling to export to the Soviet Union.

On the basis of the foregoing information, it would appear that for the present any negotiations relating to the proposed commercial agreement between the Soviet Union and Germany and the exploration of the possibilities of expanding trade between the two countries will be carried on in the regular course of diplomatic business. According to the somewhat meager information available to the Embassy at the present time, the agreement envisaged will follow closely along the lines of those formerly in effect between the Soviet Union and Germany prior and immediately subsequent to the establishment of the Nazi Government in that, from the German point of view, it appears to be based more upon the necessity of finding export markets than on the need of obtaining raw materials, although the latter element should not, of course, be underestimated. Although an improvement in Soviet-German commercial relations along the lines envisaged in the proposed agreement would, in itself, be an event of some political significance, there is no indication as yet that it forecasts the much-publicized possibility of a genuine political rapprochement between the two countries.

Respectfully yours,

Alexander C. Kirk
  1. Not printed.
  2. Karl Schnurre, head of the Eastern European and Baltic Section of the Commercial Policy Division of the German Foreign Office.
  3. Friedrich Werner, Count von der Schulenburg.
  4. For German explanations that “technical reasons only” caused the return of Schnurre to Berlin, see Department of State, Nazi-Soviet Relations, 1939–1941 (Washington, Government Printing Office, 1948), pp. 6, 12–13.
  5. Gustav Hilger.
  6. Latter not printed.