761.62/649: Telegram

The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State

400. Reference to Department’s 222.98 Reports of a steadily increasing infiltration of German engineers and technicians into the Soviet Union have been persistent since the conclusion of the Soviet-German economic agreement of February 11. It is the consensus in informed but unofficial circles that the German technicians who have come to this country recently have sought to purchase raw materials, sell German merchandise and plan for the erection and equipment of industrial plants to be built for the Soviets by Germany. A member of the staff of the German Embassy who has hitherto been a reliable informant confirms the foregoing and states no German engineers or technicians have thus far come to the Soviet Union to assist the Soviets in improving the organization of any of their industries or transport facilities or to assume charge of factory operations or transport. He states that entirely aside from the question of whether the Soviet authorities would view any such procedure with favor Germany has no wish or intention to pursue this policy. He said that the services being rendered by German technicians are identical with the type of services rendered to Soviet industry by American engineers and technicians in recent years, as, for example, in the petroleum industry and that it is contemplated that German technical assistance to Soviet industry be confined to such services. He said that the Germans had been represented by a very large delegation in Moscow at the time of the negotiations resulting in the economic agreement; that questions of transport had been carefully studied and that the German experts had come to the conclusion that Soviet transport facilities while inefficient and limited were as adequate as could be expected under the circumstances and that it would not be practical to attempt to inject German technicians into the field of Soviet transportation. He said that German engineers have been visiting and will continue to visit the Soviet Union in connection with contracts for the supply and erection of plant equipment; that they would come to plan the installation and if necessary install the equipment after delivery. He told me that the Germans regard the Soviet petroleum industry as of prime importance to them and that the installation of refineries was an important consideration. He also mentioned machinery for the aviation industry.

Insofar as concerns the actual number of German engineers and technicians who have thus far entered the Soviet Union for the purposes [Page 552] described, no accurate information is available although I believe that several hundred is a reasonable estimate. In addition to the Moscow area I understand that the principal districts visited by them have been the Caucasus, Transcaucasus, Black Sea and Dniester [Dnieper?] regions. While confirmation of my belief is not obtainable it appears logical in the light of the information furnished me by the member of the German Embassy referred to above.

With respect to the extent to which the German technicians have been able to achieve successful collaboration with Soviet personnel it is as yet rather soon to attempt to draw anything more than a general conclusion. I have been told that the Kremlin is compelling a greater degree of cooperation in the fulfillment of contracts than some Soviet officials desire. However, conceding an intense desire on the part of all Soviet officials to collaborate, the inherent difficulties caused by Soviet suspicion, indifference, incompetence and defective organization tend to impair materially what might otherwise be effective collaboration. The German attitude appears to be realistic, my informant having stated that thus far the Soviets have lived up to their agreements to the satisfaction and the surprise of the Germans.

It is my opinion that when plant installations are being made the German technicians will encounter the same difficulties in training operating personnel which have confronted our engineers in the Soviet Union, as well as the interminable delays and annoyances resulting from Soviet methods and the characteristics referred to above.

Despatch follows.99

  1. April 13, 2 p.m., not printed.
  2. Despatch No. 464, May 10, from the Chargé in the Soviet Union, not printed.