661.6231/212: Telegram

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

379. My 376. I am informed that on the basis of further instructions from Berlin the German Commercial Attaché saw Mikoyan yesterday and replied to certain questions which the latter had put on the question of their last meeting (see my 351, June 29) in respect of the basis for further restriction concerning a commercial agreement between Germany and the Soviet Union. In replying to these questions I understand that the German Government made certain concessions to the Soviet desires concerning interest rates on the 200 million mark credit, and in return requested certain increases in the amount of raw materials over those contained in the Soviet proposals made here; that Mikoyan indicated a disposition to accept these suggestions as a basis of negotiation, but stated that he would have to refer the matter to his Government, and that a reply would be forthcoming within a few days.

Grummon