711.61/756a: Telegram
The Secretary of State to the Ambassador in the Soviet Union (Steinhardt)
614. Section I. During the month of August a series of conversations were carried on between the Soviet Ambassador and Mr. Welles with a view to settling certain outstanding problems, principally of a commercial nature, in American-Soviet relations. Although constructive results were obtained in several instances, other problems still remain unsettled. A summary of the most important issues discussed [Page 389] and of the present situation with respect to them follows herewith:
1. The exclusion of Soviet engineers from the Wright Aeronautical Plant. In compliance with the request of the Ambassador, arrangements have been made whereby such engineers, under certain restrictions, may now have access to various sections of the plant for the purpose of studying manufacturing; processes.
It is believed that this problem is now settled in a manner satisfactory to the Soviet Ambassador.
2. The obtaining of American tonnage. The Ambassador has been informed that Soviet agencies in this country would probably not encounter any difficulties in obtaining American tankers for Pacific shipments; that although there was a shortage of dry cargo boats in the Pacific, any difficulties in obtaining charter thereof would be of a temporary nature and that in general such vessels would be available.
This question also appears to have been settled to the satisfaction of the Ambassador.
3. The routing of mails to the Soviet Union. Upon the request of the Ambassador appropriate instructions were issued to the Post Office authorities to route mail destined for the Soviet Union across the Pacific.
4. The purchase of Soviet gold. Reference is made to the note contained in your 937, July 31, 9 a.m.,99 Section D. The Ambassador was orally informed that this Government did not intend to discriminate against any country in the purchase of gold and that it was willing to express its views on this subject in a note to the Soviet Ambassador. This note, which has not yet been presented, reiterates the established gold purchasing policy of this Government. It also declares that this Government cannot enter into any undertaking which might tend to limit its freedom of action in the purchase of gold.
There is no reason to believe this should not be satisfactory to the Soviet Government.
5. Assurances of non-discrimination against Soviet trade. The Ambassador has requested written assurances of non-discrimination in conformity with the letter requested by Mikoyan in your 937, July 31, 9 a.m., Section B. The Department has under consideration the presentation of a memorandum to the Soviet Embassy stating in effect that it is the intention of this Government (a) to consider in a friendly spirit applications for export licenses, and (b) not to apply to orders or purchases of goods destined for the use of the Union of Soviet Socialist Republics any measures of a discriminatory character except in accordance with the policy of my Government as set forth below. It is then pointed out that the application of the policy of my Government as expressed above is subject to the limitation that it must obtain for itself full freedom to adopt any export prohibitions which it may consider to be in the interests of national defense, and to take any measures which it may deem to be necessary for insuring the security of the United States, its territories, or possessions.
Since no written undertakings are entered into as requested by Mikoyan regarding the question of irrevocable export licenses, the [Page 390] releasing of goods purchased prior to July 2, the charter of vessels, or the moral embargo, it is doubtful whether this note, if presented, will be acceptable to the Soviet Government.
6. Moral Embargo. The Ambassador has been informed that the moral embargo should not be considered an organic part of the conversations since it resulted from a situation which could have no connection with them; that because of the unilateral policy of this Government of refusing to facilitate the carrying on of certain types of warfare which it condemns, it could not enter into any bilateral agreement which might prevent it from continuing that policy; however, upon the successful termination of the present conversation, the American Government might be prepared to issue a statement raising the embargo provided the conditions which were responsible for the decision to declare it should no longer obtain.
The Ambassador stated that he would advise his Government with respect to these views.
7. The granting of passports to American engineers for travel to the Soviet Union. The Ambassador was informed that so long as the freedom of movement of United States citizens in the Soviet Union was restricted, this Government did not feel it could afford to facilitate the visits to that country of American citizens. The difficulties regarding our citizens in Soviet-occupied Poland were emphasized.
The Ambassador stated that he would take this matter up with his Government.
8. The despatch of American transport planes to China via Siberia. In reply to inquiries regarding the position of the Soviet Government on this matter, the Ambassador stated that in view of the present state of relations between the American and Soviet Governments, and the tension produced as a result of charges in the American press to the effect that the Soviet Government was fortifying the Diomede Islands, the Soviet Government could not agree to the transfer of planes from Alaska to China via Siberia. Asked specifically on August 24 whether the Soviet Government did not wish to assist China in this instance and to cooperate with the United States in the Pacific, the Ambassador stated that in view of the aforementioned question, he would request new instructions from his Government.
The Ambassador has not subsequently mentioned the receipt of any new instructions.
9. The situation regarding the export of machine tools. In view of the extremely complicated nature of this question, it is believed inadvisable to endeavor to explain the developments which have taken place here. This Government must give first consideration to its national defense program and it cannot take any action, such as the granting of irrevocable export licenses, which might seriously affect it. In the application of the Export License Act this Government is retaining as few machines ordered or purchased by Soviet import agencies as national defense requirements permit.
10. The questions regarding the withholding of Baltic assets in this country and the disposition of Latvian and Estonian vessels in American waters were touched on in the conversations but did not form an integral part since at the time the agenda was agreed on this question did not arise. The position of the United States in regard to its refusal to recognize the absorption into the Soviet Union of the Baltic [Page 391] States and to its continued recognition of the Baltic Legations and Consulates in this country was reiterated. The Ambassador was further informed that the problems in American-Soviet relations arising out of recent developments in the Baltic were insoluble for the time being and that it would be better to concentrate on difficulties which could be eliminated.
Section II. The Department now has under consideration the advisability of resuming the conversations under discussion. It would appear from your 1238, September 27, 1 p.m., that Molotov desires to see an improvement in Soviet-American relations and the Department believes that under ordinary circumstances the logical way to effect this end is through the continuation of discussions here. However, in view of the cordiality between you and Molotov, and the non-cooperative aggressiveness, in spite of the concrete results attained, which Oumansky continues to display here, the Department feels that more positive results might be accomplished through the transfer for discussion and negotiation in Moscow of many of the existing problems. The Department is of the opinion that Oumansky, in an endeavor to strengthen his personal prestige by playing a lone hand, may well be working at cross purposes with his Government. There is reason to doubt that he has reported accurately to his Government on all that has transpired here, especially on the concessions already made and on how this Government has sincerely endeavored to cooperate in these recent conversations. It is, of course, difficult for the Department to judge how extensive the instructions received by Oumansky have been, and also whether he interprets them in the way intended by his Government.
It is suggested that you see Molotov in the near future, inform him of the progress of the conversations as related in Section I (omitting any reference to the contents of the notes contained in paragraphs 4 and 5), and endeavor to ascertain what impression he has obtained not only of the results achieved thus far but also of Oumansky’s reports on the present outstanding problems.
After your conversation with Molotov, the Department would appreciate your views on the advisability of transferring to Moscow certain of the points now under discussion in Washington. In view of Oumansky’s attitude it is felt, for example, that since the notes regarding the purchase of Soviet gold and non-discrimination originally formed a part of the commercial negotiations, they may well be taken up in Moscow; that the problem regarding the granting of passports may be used by you as a bargaining point in your representations regarding the protection of American citizens in Soviet-occupied Poland; that Moscow is perhaps the more logical place to discuss the questions regarding the transfer of planes to China, the Vladivostok consulate, the additional quarters for the Embassy, and the other [Page 392] points raised in your 1238, September 27, 1 p.m. On the other hand, it is believed that the problems relating to the export of machine tools, the Baltic ships, and the moral embargo should form the agenda of future conversations here.