711.61/756: Telegram
The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received September 28—5:30 a.m.]
1238. I had a long, and unusually frank discussion with Molotov yesterday regarding the various problems which have vexed the Embassy during the past 4 or 5 months. Molotov was extremely cordial. I told him that in line with our desire to improve relations between the two countries steps had been taken in Washington to remove some of the causes of Ambassador Umansky’s complaints and that I now expected that like good will would be exhibited on the part of the Soviet Government. I pointed out to him that a favorite accusation of the Soviet Government against the United States in connection with the most trivial incidents was that the Soviets were being discriminated against and that I had brought with me a list of acts of discrimination by the Soviet Government against the United States. I invited his attention to a number of obstacles encountered by the Embassy during recent months and asked him specifically to remove these as a first evidence of good will.
I then enumerated certain of the difficulties and the cases of lack of cooperation on the part of Soviet authorities which the Embassy had encountered such as the question of the opening of a Consulate [Page 387] at Vladivostok;97 in the liquidation of our Baltic Missions and the refusal of Soviet authorities to permit the departure of the alien clerks of those Missions; difficulties placed in the way of the departure of American citizens from Soviet occupied Poland; and the continued failure to grant exit visas to the Soviet wives of American citizens. In connection with the foregoing I mentioned that other nations maintain Consulates at Vladivostok and that the Missions of other countries in the Baltic had not encountered the same difficulties as ourselves in effecting the departure of their alien clerks and certain other matters which appeared to reflect less favorable treatment of the United States. I also discussed with him the question of additional space for our increased staff, the demand of Burobin98 that official obligations of the Embassy be paid in rubles obtained at the official rate through the State Bank and other matters of a minor nature.
Molotov replied that he would give these matters his personal attention and would endeavor to see to it that we obtain relief from vexations of this character. Insofar as concerned a Consulate at Vladivostok, while he made no commitment, he indicated quite clearly that he was favorably disposed. I then inquired as to his disposition concerning a Consulate at Riga to which he replied that the Soviet Government had recently decided in principle that there would be no Consulates at Riga. When I asked whether this included Japan and Germany he replied in the affirmative. He remarked that the subjects which had been mentioned were of secondary importance and expressed his disappointment at the action by our Government in taking over the machine tools purchased by the Soviet Government in the United States.
I thereupon explained to him the necessities of our national defense program, seizing the opportunity to impress upon him the magnitude thereof and the fact that the American Navy and Air Force would be the most powerful in the world within 2 years, pointing out that it was my understanding that a substantial percentage of the machine tools in question had been or were about to be released for export to the Soviet Union. He then brought up the subject of the gold of the Baltic States sequestered by our Government and afforded me an opportunity of referring to the indebtedness of the Baltic States to the United States Government and the sizeable amount of American capital invested there in respect of which no compensation has as yet been tendered or offered by his Government and in passing I referred to the substantial amount of American capital that had been nationalized [Page 388] in Soviet occupied Poland and Bessarabia. After some further discussion on the same lines Molotov reverted to the question of the retention of machine tools ordered by the Soviet Union. When I spoke of the need in the United States for these tools Molotov replied that the Soviet Government needed them just as badly and that as the United States was a highly industrialized country he could not understand why what he described as an unimportant number of [tools?] should have been taken over. To this I replied that the Soviet Government already had considerable armament whereas the United States, as is well known, was only beginning to arm and that as events moved rather rapidly these days it seemed more desirable that the United States should have some armament quickly than that the Soviet Government should increase its armaments further.
Molotov did not seem disposed to contradict this observation and I gained the general impression that the American armament program is not at all displeasing to the Soviet Union. He gave every indication of a desire to see an improvement in our relations and indicated clearly that if the American Government should show a desire to improve relations his Government would be glad to cooperate.
Neither of us touched upon general political subjects and I thought it preferable to reserve any attempt to draw him out with respect to Soviet intentions in the immediate future for a subsequent meeting as I will be able to judge his disposition to discuss the Soviet position vis-à-vis countries other than the United States by the action taken by him in respect of the matters I brought to his attention. Should these be promptly dealt with and the general attitude of the Foreign Office undergo any marked change as a result of my talk with him yesterday afternoon I shall endeavor to see him again in the near future for the purpose of drawing him out on Soviet policy in Europe and the Far East.