Foreign Relations of the United States Diplomatic Papers, 1940, The British Commonwealth, The Soviet Union, The Near East and Africa, Volume III

711.61/827½

Memorandum of Conversation, by the Assistant Chief of the Division of European Affairs (Henderson)

[Washington,] August 7, 1940.

Participants:	Mr. Constantine A. Oumansky, Soviet Ambassador;
	Mr. Sumner Welles, Acting Secretary of State;
	Mr. Ray Atherton, [Acting] Chief, Division of European Affairs;
	Mr. Loy W. Henderson, Assistant Chief, Division of European Affairs.

The second of the series of conversations between Mr. Welles and the Soviet Ambassador with regard to problems affecting relations between the United States and the Soviet Union took place this afternoon. At the request of Mr. Welles, Mr. Atherton and Mr. Henderson were present.

After greeting the Ambassador Mr. Welles stated that he thought there was cause for gratification at the progress which had been made at the last meeting and expressed the hope that these conversations would continue to yield favorable results. Mr. Oumansky replied that in spite of the narrow basis on which the conference had taken place he also was pleased at the results achieved.

Routing of Mail to the Soviet Union

Mr. Welles suggested that the first point to be taken up was that of the routing of mail to the Soviet Union. He said that he was glad to state that instructions had already been issued by the appropriate United States authorities for the routing through Vladivostok of mail to the Soviet Union and to the three Baltic countries of Latvia, Lithuania, and Estonia. Mr. Oumansky expressed his appreciation of this step. He added that he had been surprised at the recent smoothness of the transmission of mails from Moscow to Washington. Whereas during the past Winter and Spring it frequently happened that it took three or four months for mails to travel from Moscow to Washington, the Embassy was now receiving mail within four weeks from the date of its despatch from Moscow. He said he would appreciate it if inquiries would be made of the American postal authorities as to the routing of these mails. It might be that if these mails are coming across Europe and if there can be some assurance that they will continue to come with such satisfactory speed, the Soviet Government would be satisfied with the European routing and would not desire to put the American postal authorities to the inconvenience of routing mail through Vladivostok. Mr. Welles informed Mr. Oumansky that appropriate inquiries would be made and the Embassy would be informed regarding the route over which recent mails had come.

Chartering of American Vessels by Amtorg or Other Soviet Agencies

Mr. Welles referred to the complaints which Mr. Oumansky had made at the previous conference regarding difficulties encountered by Soviet agencies in chartering American vessels for the transport of merchandise to or from the Soviet Union. Mr. Welles stated that he was glad to say that Soviet agencies would probably not encounter any more difficulties with respect to tankers since for the present, at least, tankers seemed to be available for the run between American and Soviet Pacific ports. The situation with respect to dry cargo vessels was somewhat more difficult. It was frequently impossible to meet the demand for such vessels with the present supply of tonnage. He felt quite certain that any difficulties which might be encountered in chartering such vessels would be only of a temporary nature, and that in general dry cargo vessels would be available for trips to the Soviet Union.

The Soviet Ambassador replied that he was glad to receive this statement. He felt that he should point out, however, that the situation at present remains unsatisfactory, although for reasons other than those which existed a few months ago. Prior to last June there were large consignments of merchandise destined for the Soviet Union piled up on the wharfs and in the warehouses awaiting ships, the chartering of which the Maritime Commission would not approve. Now there were plenty of ships available but unfortunately the American authorities would not permit the release of merchandise destined for the Soviet Union which was ready for shipment. The abundance of ships arose from the fact that Soviet boats were commencing to operate between Murmansk and American ports. The third Soviet vessel from Murmansk had recently arrived in the United States. There was also considerable Swedish tonnage available for the Soviet trade at the present time and, now that some American tonnage could be used, the question of obtaining bottoms for the transfer of merchandise was no longer serious. Cargo rather than tonnage seemed to be the outstanding problem at the present time

The Question of the Detention in the United States of Machine Tools Purchased by Soviet Governmental Agencies

Mr. Welles referred to the promise which had been made at the last conference that he would furnish the Soviet Ambassador two lists of machine tools—one list itemizing the machines which the American Government desired the Soviet owners to sell to American manufacturers, and the other enumerating tools which could be released in case the sale of the machine tools in the first list should be agreed to. Mr. Welles handed the two lists⁷⁰ to the Ambassador pointing out that the goods which were to remain in the United States aggregated only about $800,000 in value, whereas the value of those which might be permitted to leave the country would amount to more than $2,800,000. Mr. Welles also emphasized the fact that although the lists had been compiled with considerable care and undoubtedly represented the situation correctly, there was, nevertheless, a possibility that a few machines might subsequently be transferred from one list to another.

The Ambassador, after glancing at the lists, said, “Bad news, Mr. Secretary, very bad news. I had hoped to have a very different kind of a reply from you.”

Mr. Welles suggested that the Ambassador take the lists with him and have them subjected to careful study by his technical assistants. He said that in case the Ambassador should feel that there were cogent reasons why certain machines should be transferred from one list to the other, he would be pleased to have the Ambassador present them to him.

The Ambassador again expressed his disappointment at finding in the first list so many articles of great importance to Soviet economy. He said that it was his understanding that the purpose of the present conversations was to eliminate tension in the relations between the two countries. The policies of the American Government, even though they might not be aimed directly against the Soviet Union, were resulting in the placing of obstacles in the way of Soviet-American trade. For years the Soviet Union had occupied first place as foreign purchaser of American machine tools. It had now fallen down to fourth place. It was the belief of the Soviet Government that a much broader approach to this question could have been possible. It seemed to it that this problem could best be solved in the way suggested by Mikoyan,⁷¹ namely, that the President’s proclamation of July 2 be not given retroactive force. The Ambassador then proceeded to point out at length the unfairness of the attitude of the American Government. He emphasized the fact that in placing orders in this country under the present system, the Soviet Government had no guarantee that machines which might be ordered in the United States would ever be delivered. In general, his complaint was upon two grounds—1) that of insecurity and 2) that of discrimination—in view of the fact that the Soviet Government was not being granted most-favored-nation treatment.

Mr. Welles replied that our Government fully understood the inconveniences which the Soviet Government was bound to suffer and regretted them. It was precisely because of this understanding that he had suggested that the Ambassador feel free to advance reasons why any particular machines which our Government desired to retain in the country should be released.

Mr. Welles pointed out that in times like the present questions of international defense must rise above everything. When the American experts tell the President that certain machine tools which are in this country are necessary for the execution of the national defense program, there is only one thing to be done—that is, to take steps to retain them. Mr. Welles also expressed the opinion that when the situation with respect to the needs of American industry had become more clear, it would be found that there would be a relative security in the trade between the two countries. Soviet purchasing agencies would probably be able to count with reasonable assurance on obtaining goods for which export licenses had been granted.

Mr. Oumansky said that another thought had occurred to him. He would advance this thought as a personal suggestion since he had no instruction from his Government with respect to it. If, for instance, machine X which the American Government felt should be retained in this country because of present urgent needs could be duplicated, say within four months, could the American Government issue licenses which would permit the Soviet Government to have a copy of the machine within that period? Mr. Welles replied that this seemed to be a fair question and would be given consideration. The Ambassador again stated that he had no authority to raise the question. Mr. Welles stated that the suggestion would be considered as having come from himself.

Mr. Oumansky said that after casually examining the lists he found them more unsatisfactory than a first glance would indicate. He found that the most valuable machines were among those to be detained. The element of quality made the lists still more unfavorable than that of quantity. He did not know what kind of a shock absorber he could devise in transmitting these lists to his Government. He hoped that the matter would not be considered as entirely closed. If it should be so considered, the outlook would be very gloomy.

Mr. Welles stated that in his opinion it would be wise, during the course of these discussions, not to consider anything as a closed book.

The Moral Embargo

Mr. Oumansky referred to the exchange of remarks which had taken place at the last conference relating to the so-called moral embargo upon the granting of technical assistance to the Soviet Government in the matter of the building of aviation gasoline plants. In that conference the general question of the moral embargo and its effects had not been dwelt upon. The Soviet Government had never purchased large quantities of the commodities which had been covered by the moral embargo. Soviet industry, however, had suffered considerable injury as the result of its inability to receive American technical assistance in the construction of aviation gasoline plants, at the cessation of the supplies of molybdenum, and at its failure to receive the newest models of American airplanes for which it had been contracting over a period of many years. The worst result of the moral embargo, however, was the effect which it had upon the attitude of American business towards Soviet trade. The public, to an extent, followed the line laid down by the Government. By announcing that the moral embargo was applicable to the Soviet Union, the American Government raised in the minds of wide business circles doubts as to the morality of having any dealings with the Soviet Government, or at least caused these circles to feel that they might be criticized if it should be known that they were having such dealings. If there was to be a different atmosphere in the relations between the two governments it was important that something be done to cause the American public to feel that no stigma should be attached to Soviet trade. He did not wish to suggest the form of action which should be taken to eliminate the unwholesome effects of the moral embargo.

Mr. Welles replied that the situation as outlined by the Ambassador would be given serious consideration and would be discussed later.

Imports of Soviet Gold Into the United States

The Ambassador stated that several years ago he had had a “paradoxical talk” with Mr. Morgenthau regarding shipments of Soviet gold into this country. Mr. Morgenthau had told him during this conversation that it would be unfortunate if the United States should at any time be flooded with Russian gold. At the present time the trade balance between the United States and the Soviet Union was distinctly unfavorable to the Soviet Union. The Soviet Union must of necessity, therefore, sell gold in the United States in order to be able to continue its purchases of American goods. In view of numerous difficulties which the Soviet Government has encountered during the last year it desired to make sure that no unpleasant surprises might await it with respect to gold. It was hoped, therefore, that the American Government could agree that during the coming year it would take no steps which might interfere with the sale of Soviet gold in the country.

Mr. Welles asked Mr. Henderson if he would clarify the situation somewhat with respect to gold. Mr. Henderson replied that according to his understanding the American Government for many years had followed the policy of declining to make any undertakings which would bind its hands in the matter of restricting the importation or exportation of gold. He was certain that the American authorities could not, therefore, give an undertaking of the kind which Mr. Oumansky suggested. So far as he had been able to ascertain, no restrictions on the import or sale of Soviet gold were being considered at the present time. Nevertheless, he doubted that any commitments could be made.

The Ambassador said that he felt confident that if the American Government was unable to give any formal undertaking not to restrict the sale of Soviet gold in the United States during the coming year an informal letter to the effect that no such restrictions were being contemplated at the present would be sufficient. In his personal opinion there was no great danger of such restrictions being placed upon the imports of Soviet gold. He did not, therefore, attribute as much importance to the matter apparently as did his Government. Mr. Welles asked Mr. Henderson to have prepared a memorandum for him on the subject of our policies with respect to gold.

Difficulties Encountered by Soviet Engineers With the Wright Aeronautical Plant in Paterson, New Jersey

The Soviet Ambassador said that he now desired to pass on to a matter which had been the subject of several conversations between members of the Department, including Mr. Moffat, Mr. Feis, Mr. Henderson and himself. He referred to the exclusion of Soviet engineers from certain sections of the Wright Aeronautical Plant in Paterson, New Jersey.

The Ambassador went on to explain that an agreement for technical assistance had existed for a number of years between the Wright Aeronautical Plant and an agency of the Soviet Government; that under this agreement the Wright plant was obligated to furnish the Soviet engineers plans of improvements and new devices and to permit them to enter the plant in order to observe the manufacturing processes called for in the production of new types of equipment; that this contract had worked out satisfactorily until seven or eight months ago; and that subsequently Soviet engineers allegedly under orders of American Governmental authorities had been restricted to certain parts of the plant and were thus not able to obtain the information called for in the contract. In consequence of these restrictions Soviet engineers have been placed in a humiliating position. In the first place they have themselves been wasting their time. In the second place they have been given to feel that they were considered as less worthy of trust than engineers of other countries who were being allowed to enter sections of the plant from which they were being excluded.

The Ambassador said that in reply to previous protests which he had made to the Department relating to this subject he had been informed that no discrimination against Soviet engineers existed. He had been given to understand that the engineers only of those countries for which airplanes were being manufactured in mass production were being given privileges denied to the Soviet engineers. He had learned, however, that such was not the case. Although airplanes were not being made in large numbers for China, for instance, nevertheless Chinese engineers were being admitted in parts of the plant from which Soviet engineers were being excluded. This contract of technical assistance was extremely important to the Soviet Union. It would lose its meaning unless some arrangements could be made which would permit the Soviet engineers to go into all parts of the plants except naturally those parts where work was actually being done on secret devices for the American Government. He firmly believed that some kind of a modus vivendi could be found whereby Soviet engineers could be admitted at least to those parts of the plant, admittance to which was necessary for the proper functioning of the agreement.

Mr. Welles replied that he considered that the suggestion of the Ambassador was reasonable and that he would look into the matter at once and discuss it later with the Ambassador. The Ambassador said that he could give personal assurances that the Soviet engineers would show full respect for all secrets of American national defense and would not take advantage of such privileges as might be granted them in accordance with their contracts.

Incorrect Decisions of Courts in the United States With Respect to Conditions in the Soviet Union

The Ambassador stated that the next question which he desired to discuss related to actions taken by the Judicial Branch of the Government. He realized the independence of both branches and the reluctance of the Executive Branch to take any action which might be considered as an infringement upon the independence of the Judicial Branch. He hoped, however, that the Executive Branch of the Government could give certain explanations to the Judicial Branch with regard to conditions in the Soviet Union with respect to which the Judicial Branch apparently was without knowledge.

He wished in particular to refer to a question which had arisen during the last year relating to the transfer of the residue of estates from the United States to the Soviet Union. The amounts affected were modest but the principle was important. In November 1939, the Surrogate Court of King’s County, New York, in deciding not to approve the transfer of certain property to heirs in the Soviet Union stated that private property in the Soviet Union had been abolished. This decision served as a signal to the courts in various other counties in New York and in other states. A series of decisions of a similar character have followed. It must be quite well known to the Department of State that the statement made by the Surrogate Court of King’s County was not in accordance with fact; the constitution of the U. S. S. R. itself takes cognizance of private property rights in the Soviet Union.

Mr. Welles stated that this matter had not previously been brought to his attention and he suggested that the Ambassador send a description to Mr. Henderson of the various cases in which the decision in question and similar decisions had been made, together with the appropriate citations. He assured the Ambassador that upon receipt of this information, the Department would be glad to investigate the matter.

Annoyances Suffered by Soviet Citizens in the United States as the Result of Persecutions by Federal and State Authorities

The Ambassador stated that during the past year there had been an endless number of incidents involving mistreatment of Soviet citizens in the United States by State and Federal officials. Unfortunately the number of these cases was increasing. It would appear that Federal agents, as well as agents of the State, did not have instructions from the American Government regarding the manner in which Soviet citizens should be treated. Many of the 160 Amtorg officials who had recently departed from the United States had left because of the humiliations which they had suffered while in the country. Numbers of them had told him frankly that they could not tolerate the type of treatment which had been meted out to them and would not live in a country in which they were compelled to suffer such indignities.

The Ambassador described in some detail a number of cases in which Soviet engineers and other Soviet citizens had been detained or arrested on suspicion by Federal or local authorities, had been subjected to examination, and had been given inconsiderate, if not insulting, treatment while being examined. He mentioned the case of the arrest of the two engineers in Pittsburgh and referred to a recent incident in Baltimore in which Federal police had seized and examined the baggage of Soviet engineers and had compelled one of them to parade through the corridors of the hotel in his underwear.

The Ambassador said that a number of incidents involving mistreatment of Soviet officials had already been reported to Mr. Henderson. Mr. Henderson stated that several cases had been brought to his attention; none of them, however, except that of the arrest of the engineers in Pittsburgh,⁷² had involved Federal officials. Mr. Henderson said that furthermore he did not feel that any of the cases, except the Pittsburgh case, which had been reported to him were of a serious nature. They seemed to him to represent mere instances of temporary detention by perhaps overzealous local authorities of Soviet engineers traveling through the country. No evidence had been submitted which would show that these detentions were other than a part of the efforts of the local authorities to make sure that the aliens in the area for the order of which they were responsible were not engaged in activities contrary to the laws of the United States.

Mr. Welles suggested that the Ambassador cause to be prepared a memorandum describing in some detail instances of mistreatment of Soviet citizens, and that the memorandum be given to Mr. Henderson.

The Ambassador said that he wished to refer to difficulties which Soviet officials and members of Amtorg had been encountering with respect to admittance into the United States and to the extension of visas. These Soviet citizens had often been compelled to wait for months for the receipt of replies to petitions for the extension of permits to reside in the United States. There were also cases in which Soviet engineers or members of their families had been detained in Ellis Island upon their arrival in the United States, despite the fact that they had been in possession of valid visas issued by the American Embassy at Moscow. He had been told in the Department that the possession of a valid American visa did not necessarily guarantee that the immigration authorities would admit any alien into the United States.

Mr. Henderson stated that such was in fact the case. The immigration authorities had the right to investigate and to reject aliens entering the United States even though the travel documents of such aliens might be in order. Mr. Henderson asked if there had been any recent cases of detention in Ellis Island and the Ambassador referred to the detention several weeks ago of a Soviet official who had departed on the President Washington and had been compelled to return with that vessel when it had changed its course upon instructions from the American Government, and instead of going to Genoa, had proceeded only as far as Lisbon.

The Ambassador said he desired to dwell upon one case which had been particularly irritating to the Soviet Government. That was the case of Bookkniga. It would be recalled that Bookkniga had been prosecuted for having failed properly to register as the agent of a foreign Power.⁷³ The fact was that Bookkniga had registered and had been given to understand that its registration was in order. Nevertheless, upon the flimsiest of technicalities a case had been built up against it. The officials of the corporation, which had been engaged in importing and exporting printed matter between the United States and the Soviet Union, had been coerced into confessions of guilt and had been fined. In pursuance of an agreement with the authorities they had pleaded guilty and had been released upon the payment of a fine. As a final insult, however, the Federal authorities during the 20 minutes which elapsed between the filing of the plea of guilty and the payment of the fine handcuffed them and permitted the press to photograph them. Some of the most learned professors in American law schools after a careful examination of this case had stated that the defendants had been indicted unlawfully and that charges against them were of an extremely technical nature.

As a result of the treatment given to Bookkniga, the corporation had ceased conducting business. It has since been almost impossible for American universities and learned institutions to obtain Soviet scientific and economic publications for their libraries.

Pronouncements of Officials of the United States Government Hostile to the Soviet Union

The Ambassador said that he desired now to discuss certain incidents in the political field which had given rise to much resentment in the Soviet Union. He referred in particular to pronouncements against the Soviet Union which had been made during recent months by responsible officials of the Government of the United States. Numerous statements of this nature had been made. He would limit his remarks, however, to three of them.

In the first place he wished to refer to the recent pronouncement made by Mr. Welles relating to developments in the Baltic States. Statements of this kind made the task of improving relations between the two governments extremely difficult. He failed to understand why so violent exceptions should have been taken to the advancement of democracy in Eastern Europe. The American Government should realize that if the Soviet Government had not interfered to the extent of introducing Soviet democracy into certain areas in Eastern Europe, those areas would have fallen easy prey to an expanding movement which was the antithesis of democracy. An important section of public opinion in the United States viewed what had happened in the Baltic area in an open minded manner. They were pleased to see such doctrines as those which the present administration of the United States advocates, namely, social equality and reform and racial equality introduced into new areas in Eastern Europe. The Baltic people historically had lived together with the Russian people for a period longer than that during which the United States had been independent. It could not be understood why the resumption of normal relations between the Baltic people and the Russian people should have produced an expression from the American Government which was not the type of statement usually made by one government regarding another government maintaining friendly relations with it. The Ambassador said that in making this protest he wished it to be understood that he had no desire to place the conversation on a personal basis.

Mr. Welles replied that he understood the position of the Ambassador and that the Ambassador, of course, must realize that the statements to which the Ambassador referred were not an expression of personal views of Mr. Welles but that of the views of the American Government. The Ambassador replied that, if the views expressed were those of the American Government, the pronouncement was indeed serious.

The Ambassador said that the second statement to which he wished to take exception was the speech which had been made some time ago by Assistant Secretary of War Johnson before a group of American bankers in New York City.⁷⁴ He had already referred to this statement in conversations with Mr. Hull. During the course of this speech Mr. Johnson had made remarks which were insulting to the armed forces of the Soviet Union. He called them forces of bigotry and oppression. Other remarks contained in Mr. Johnson’s speech were equally offensive to the Soviet Union. No replies had as yet been made to his protests with regard to this speech to the Secretary.

The Ambassador said that the third instance was the statement made on May 1, 1940, by General Marshall before a Congressional subcommittee to the effect that the Soviet Government was fortifying Big Diomede Island which lies only a few miles from American-owned islands adjacent to the Alaskan coast. He could not understand why such a statement had been made. Historically there never had been any contradictions between Russia and the United States. It seemed unfortunate that just at this time statements which might have the result of artificially creating such contradictions should be made. The impression created by these statements was that it was necessary for the United States to arm because of the menace of the Soviet Union. The Ambassador said that he could not understand why the head of the American Army should be taking such an attitude with respect to the Soviet Union.

Mr. Welles replied that he was not acquainted with the nature of the statements nor with the situation which had given rise to them. He could only infer from what the Ambassador had told him that General Marshall must have had cause to believe that the island in question was being fortified, and that that fact would be of interest to members of the Congressional committee. He said that he would be glad to look into this matter.

There were further complaints, the Ambassador continued, which he could register with respect to unfriendly statements which had been made by American governmental officials. Some of these statements had been made by persons in much higher positions than those whose names he had already mentioned. He considered, however, that it might be in bad taste and probably would serve no purpose to register protests against statements emanating from such high sources.

Mr. Welles called the attention of the Ambassador to the fact that during their first conversation regarding Soviet-American relations, the Ambassador had mentioned the statement made by Mr. Welles with regard to Soviet actions in the Baltic States. At that time it was agreed that with respect to this point the two governments would agree to disagree but that they would endeavor, so far as possible, to eliminate other points of disagreement between them. The Ambassador, however, had raised this question again. In the same friendly spirit in which the Ambassador had made his protests Mr. Welles would therefore endeavor to reply to them.

For almost 20 years, Mr. Welles continued, the American Government has looked with sympathy upon certain aspects of the foreign policy of the Soviet Union, namely, the apparent desire of the Soviet Government for peace. It was unfortunately the view of the United States that the policy of the Soviet Union had undergone a change during the last year. The invasion of Finland last winter⁷⁵ was regarded in the United States as an unprovoked attack by a great Power upon a small neighboring country. The ties of friendship between the United States and Finland were close. There were many persons in this country who were of Finnish origin or who had relatives in Finland. People in the United States admired the genius of the Finnish people and Finnish institutions. Somewhat similar sentiments existed with respect to the three Baltic countries which recently had been invaded by Soviet forces. In view of the well established policy of the American Government, it was impossible to let these things pass unnoticed and undeplored at a time when the forces standing for international law and order must hold firmly against tendencies towards agression and the use of force.

Mr. Welles said that in this connection he felt impelled to refer to a matter which he would not have mentioned if the Ambassador had not just made his complaints. He wished to point out that unfriendly remarks with regard to the United States had been made by Soviet officials. Not long ago, for instance, Mr. Molotov had declared that the United States Government was imperialistic and was keeping Cuba under its domination.⁷⁶

With respect to the speech made by Mr. Johnson, Mr. Welles continued, the American Government did not consider that address as an official pronouncement. So far as contradictions between the United States and the Soviet Union were concerned, he agreed that there was no occasion whatsoever for any conflict of interest between the two countries. The remarks which had already been made belonged to the past. He hoped that in the future there would be no occasion for the making of further statements by the American Government or American officials critical of the foreign policy of the Soviet Union.

The Ambassador stated that he regretted that the impression should have been created in the United States that the policy of peace of the Soviet Union belonged to the past. Soviet policy had not changed. The situation had altered. It was not the fault of the Soviet Government that the system of collective security had collapsed. The Ambassador himself had been in Moscow during the period of the negotiations which had resulted in the signing of the non-aggression pact between the Soviet Union and Germany.⁷⁷ He therefore could personally vouch for the truth of the statements which he had made above.

The Ambassador said that he had returned to the United States with a message from Stalin suggesting that peace might possibly be brought about by the common efforts of the United States and the Soviet Union. No answer to this suggestion had ever been made. It was unfortunate that Soviet relations with countries the foreign and internal policies of which were in sharp contradiction with those of the Soviet Union, seemed to develop more satisfactorily than relations with countries with which the Soviet Union had much in common. The desire for security had forced the Soviet Union to improve its international position. The steps which the Soviet Government had taken during the last year were not in contradiction to its previous record.

Mr. Welles replied that there could be no question that the government and people of the United States had assumed that the policies of the Soviet Government had undergone a change. He was therefore extremely interested in the statements made by the Ambassador to the effect that no such change had taken place. The Ambassador had pointed out that a change had occurred in the international situation. This statement was, of course, true, and that is precisely one of the reasons why the two governments should endeavor to work out some practical method for closer cooperation. The forces represented by the Soviet Union and the United States should work together more closely during these troublesome periods.

The Ambassador said that Mr. Welles was making statements of real importance and was looking ahead.

The Ambassador stated that he had no more complaints to register at the present time. When the conversations started it had been his intention to protest on fifteen different points. However, in view of the spirit in which they were being conducted he had decided that it would be better to limit his protests to matters of real importance; therefore he had reduced the number to nine. In summarizing the result of the day’s conversations, he understood that:

(1) The freezing of the Baltic funds would, if possible, be discussed at the next conference.

(2) The question of the issuance of licenses for Soviet machine tools would be studied by the Embassy and would be discussed further at the next conference.

(3) The American Government would take into consideration his comments with respect to effects of the moral embargo upon Soviet-American trade.

(4) The matter of Bookkniga and similar instances of persecution would be considered as a thing of the past.

(5) The matter of the sale of Soviet gold in the United States would also be discussed at the next meeting.

(6) The Soviet Embassy would prepare and give to Mr. Henderson a memorandum setting forth some of the cases in which Soviet engineers in this country had been mistreated by Federal and local authorities.

(7) The Soviet Embassy would furnish Mr. Henderson a memorandum regarding the decisions of the American courts to which the Soviet Government took exception.

The Ambassador said that he was especially pleased at the spirit in which outstanding differences had been discussed. Mr. Welles stated that he hoped that the conferences could continue on the same plane and suggested that questions relating to political matters be regarded as closed.

Monday, August 12, at 3 p.m. was tentatively set as the date for the next meeting.⁷⁸

70. Neither attached to file copy of this document.
71. The proposals of Anastas Ivanovich Mikoyan, People’s Commissar for Foreign Trade of the Soviet Union, were reported by the Chargé in his telegrams No. 936, July 30, 6 p.m., and No. 937, July 31, 9 a.m., pp. 446 and 449, respectively.
72. On July 6, Ambassador Umansky had made representations to Mr. Henderson in regard to the alleged mistreatment of two Soviet engineers, Viktor Chichkov and Viktor Korsoun, by the police of Pittsburgh, Pennsylvania. After a series of investigations, in a conversation on October 2, Mr. Atherton read to the Ambassador the report on the incident received from the Governor of Pennsylvania, which denied any mistreatment of the engineers and described how they had been arrested for intoxication, disorderly conduct, and for involvement in a street brawl. As the Ambassador was not disposed to accept this explanation of the affair, Mr. Atherton proposed that the Soviet Embassy and the Department of State should each make their own records and that the matter be considered closed. Apparently no further representations were made.
73. See Foreign Relations, The Soviet Union, 1933–1939, pp. 926 ff.
74. See footnote 56, p. 249.
75. See Foreign Relations, 1939, vol. i, pp. 952 ff.
76. See telegram No. 847, November 1, 1939, from the Ambassador in the Soviet Union, Foreign Relations, The Soviet Union, 1933–1939, p. 786.
77. Signed at Moscow on August 23, 1939; for text, see Department of State, Nazi-Soviet Relations, 1939–1941 (Washington, Government Printing Office, 1948), p. 76; or Documents on German Foreign Policy, 1918–1945, series D, vol. vii, p. 245.
78. See infra.