191.1/499
The Chargé in the Soviet Union (Thurston) to the Secretary of State
[Received September 17.]
Sir: I have the honor to inform the Department that Mr. V. A. Valkov, Chief of the Division of American Countries of the People’s Commissariat for Foreign Affairs, today called to his office Mr. Ward of the Embassy staff and stated that it is the desire of the Soviet Government that the Embassy observe the practice followed by the other foreign displomatic missions in Moscow with regard to the payment of foreign consular fees, i. e., that Soviet currency be accepted in payment of such fees.
Mr. Ward explained to Mr. Valkov that fees collected by the Foreign Service are prescribed in the Tariff of United States Foreign Service Fees and are payable in United States currency or its equivalent in local currency. He also informed Mr. Valkov that since there is no means, other than under authority from the People’s Commissariat for Finance in each instance, whereby rubles may be converted into United States currency, there is no free equivalent in Soviet currency for United States currency, and that notwithstanding the current rate of exchange observed by Soviet banks is Rubles 5.30 to $1.00 this rate of exchange is a free equivalent only in exchanging United States currency into Soviet currency, and that even Soviet currency received in consequence of such an exchange may not be re-exchanged into United States currency without special permission from the People’s Commissariat for Finance. Mr. Valkov was informed that should arrangements be made whereby Soviet currency accepted by the Embassy in payment of fees may be converted into United States currency and/or bills of exchange on New York upon demand by the Embassy at the Bank for Foreign Trade of the Union of Soviet Socialist Republics, or any other bank in Moscow, it would seem that these arrangements would create what could be considered a free equivalent in Soviet currency for United States currency and that the Embassy would then be able to accept Soviet currency in payment of fees. Mr. Valkov stated that such an arrangement would hold no interest for the Soviet Government, which desires that the Embassy accept Soviet currency in payment of fees without any obligation on the part of his Government or any of its organs to redeem such currency in foreign currency—he added that the Soviet currency thus received could be applied to local expenses, upon which he was informed that funds received in payment of fees are remitted to the Treasurer of the United States, and that funds required for local expenses are obtained against bills of exchange drawn on the Treasurer of the United States or the [Page 381] Secretary of State, a system precluding the adoption of the system suggested by him.
Mr. Valkov requested that the Embassy submit to the Department for consideration by the United States Government the request of the Soviet Government that special arrangements be made whereby Soviet currency may be accepted in payment of Foreign Service fees at the official rate of exchange without regard as to whether or not the Soviet currency thus accepted may be converted into United States currency. It was suggested that since the realization of the request set forth by him would probably require a change in existing statutes this request be stated in writing to which he replied that the request is clearly understood by the Embassy and he failed to perceive any need for it being formulated in writing.
In the ensuing conversation Mr. Valkov requested that the Embassy should inform its Government that should it not be able to accept Soviet currency at “the bank rate of exchange” (i. e., Rubles 5.30 to $1.00) the Soviet Government will be obliged to take “reciprocal action” in the matter of fees from American citizens. When questioned regarding the “fees” to which he had reference he made specific mention of Soviet residence permits (present fee Rubles 5.50) and copies of public records (present fee Rubles 11.00), upon which he was informed that all Soviet currency remitted by the Embassy in payment for copies of public records is purchased from the Bank for Foreign Trade unless the American citizen desiring the record is resident in the Soviet Union. It was further pointed out to Mr. Valkov that such action on the part of the Soviet Government would not be “reciprocal” but would constitute a discrimination against American citizens since the nationals of no other country are required to pay in foreign currency the fee for a Soviet residence permit, whereas “reciprocal action” would be the collection of fees in Soviet currency by the Soviet Embassy and the Soviet consular offices in the United States. Mr. Valkov stated that Soviet currency is not available in the United States since its exportation from the Soviet Union is prohibited by law, upon which he was reminded that by this statement he himself had explained why Soviet currency may not today be accepted in payment of American fees—Soviet currency thus accepted may not be remitted to the Treasurer of the United States. Mr. Valkov withdrew his request that the Embassy inform its Government of the previously mentioned “reciprocal action”, and stated that the action which may be taken upon the receipt by the Soviet Government of a reply to its request that Soviet currency be accepted in payment of Foreign Service fees will be discussed subsequent to the receipt of such reply.
[Page 382]It was pointed out to Mr. Valkov that in accepting only United States currency in payment of fees the Embassy is not discriminating against Soviet citizens since American citizens and all non-American citizens alike are required to pay these fees in United States currency. He was reminded that in actual practice Soviet individuals and organizations enjoy a privilege under the Embassy’s “exchange order” system not even enjoyed by American citizens (this system is explained in an accompanying memorandum94).
While the Soviet Government’s request, as set forth orally by Mr. Valkov, is hereby submitted to the Department for its consideration, it is the Embassy’s opinion that the desired special arrangements should not be made since the inability of the Embassy to accept Soviet currency as a local currency equivalent of United States currency issues not from any restriction set up by the United States Government but is the consequence of currency restrictions set up and enforced by the Soviet Government. Were the Soviet statutes and regulations restricting the buying and selling of Soviet currency removed, thereby permitting the ruble to become a free currency, the Embassy would be able to exchange rubles into dollars freely and could therefore accept Soviet currency in payment of Foreign Service fees.
Respectfully yours,
- Not printed.↩