641.6131/217: Telegram
The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received October 25—3:25 a.m.]
1408. A member of the British Embassy who has been intimately connected with trade negotiations between Great Britain and the Soviet Union last night furnished the following details in the strictest confidence:
Last June the British Embassy submitted to the Soviet authorities a list of the commodities which, in the opinion of the British Government, might constitute the basis for a trade agreement. The Soviet [Page 622] Government replied proposing separate barter arrangements for the exchange of one commodity against another. This counterproposal was rejected by the British Ambassador who insisted that all of the commodities to be exchanged be incorporated in a single agreement. Subsequently the Soviet authorities appeared to acquiesce in the British view and on October 16, in the course of a discussion of other matters, Mikoyan told the Ambassador that the Soviet Government was prepared to acquire wool, jute, rubber and tin in exchange for chrome ore, flax, lumber, lubricating oil and rifles. Although the British had previously indicated the amounts of these and other items which they were prepared to exchange, Mikoyan has at no time specified either the amounts desired by the Soviet Government or the amounts the Soviet Government was prepared to offer in return.
My informant refrained from disclosing the British figures other than to state that they had incorporated an offer to purchase 70,000 tons of lubricating oils and 40,000 tons of chrome ore and added that the British had little hope of obtaining more than 10,000 tons of lubricating oils. He stated that when the question had been put to Mikoyan as to whether the Soviet authorities would be able to provide ammunition with the rifles, the latter had replied that as the possibility of selling rifles to Great Britain had only recently occurred to him the question of ammunition had not been given any consideration as yet. In conclusion my informant observed that he did not regard the negotiations as proceeding satisfactorily although he considered the apparent willingness of the Soviet authorities to discuss a general agreement covering commodities as somewhat encouraging.
I am of the opinion that the failure of the Soviet authorities to refer to specific quantities in the course of conversations which have extended over a period of more than 4 months and Mikoyan’s comment respecting ammunition constitute a strong indication that these negotiations have not yet been taken very seriously by the Soviet Government.