661.6231/249: Telegram
The Chargé in Germany (Kirk) to the Secretary of State
[Received November 23—10 a.m.]
2102. My 1740, October 18, 2 p.m. According to German officials the first phase of the Soviet-German trade negotiations which have been in progress since the exchange of notes between the Foreign Ministers of the two countries on September 28 providing for the elaboration of a mutual economic program will soon be completed. The German Government hopes however that the first stage of the negotiations will be followed by standing consultation and cooperation towards the improvement of exchanges and transportation between the two countries.
[Page 496]According to one of the German delegates the Russian negotiators have so far shown a large spirit of accommodation agreeably surprising the German delegation which had anticipated that the conversations would be difficult and marked by haggling over prices and quantities. Ambassador Bitter who is in charge of the negotiations for Germany told a member of the Embassy that results were much greater than he expected, that Russia had so far agreed to furnish “several million marks” of raw materials including foodstuffs.
As to the kind and quantity of commodities which Russia has so far agreed to deliver the German press has announced that the Reich will receive 1,000,000 tons of feed, grain, mainly barley. (See my 1870, October 28, noon).67 Wiehl,68 who is nominally head of the trade negotiations in the Foreign Office, although for certain matters he now seems to be subordinate to Ritter, his predecessor, informed a member of the Embassy that Russia had also agreed to furnish 1,000,000 tons of petroleum products and he asserted that this was an initial quantity which would later be increased. Another advantage known to have been gained by the Reich is the agreement of the Russian Government to permit the free transit of German exports and imports from Iran, Afghanistan, the Far East over Russian territory. The Ostwirtschaft, a semi-official publication devoted to Germany’s Eastern trade, has announced that special licenses for transit to and from these countries will be issued by the Soviet trade representative in Berlin.
The Embassy is also informed that the Soviet Trade Commission had agreed to furnish the Reich with 100,000 tons of cotton during the next 12 months. This report obviously requires confirmation since the amount is several times higher than normal exports of cotton by the Soviet Union.
While, according to statements by German officials, trade negotiations with Russia have so far been more successful than anticipated by the German authorities, sources in contact with these negotiations state that the Reich has no reliable indications or assurances that expansion of trade with Germany has been adopted by the Soviet Government as a permanent policy. These sources stated that while Russia finds it economically necessary or advantageous at this time to purchase certain German equipment, mainly machinery, but also according to certain reports armor plate strips, submarine naval equipment and artillery, the real motives behind the new willingness to trade with Germany are obviously political and that the continuation of the present situation is therefore highly uncertain. Inform Treasury.