861.24/434⅙
Memorandum by Mr. Edward Page, Jr., of the Division of European Affairs to the Under Secretary of State (Welles)
Mr. Welles: Before a definite answer is given to Mr. Oumansky concerning the release for export of the machine tools to the amount of approximately $2,000,000 which have been accepted by Soviet purchasing agencies, I believe that it would be advisable carefully to examine the list of such tools which the Ambassador has been asked to furnish the Department. We know that this list will show certain machines [Page 397] which have already been diverted to and are in use by American manufacturers under national defense contracts. It may also show other tools which are of such vital importance to our defense program that their release may seriously disrupt a key industry. I do not believe that any improvement in American-Soviet relations which might result from the release of these machines would be sufficient compensation for the possible serious disruption which might follow in our defense industries. Furthermore, I believe that unfavorable public reaction might result should it be learned that certain vital equipment had been released for export to the Soviet Government.
On the other hand, it may be possible to undertake the immediate replacement of certain of these machines without disrupting to a too great extent our defense program. It is also quite possible that many of the “accepted” tools lying in American ports whose applications have been rejected may be released immediately. It is probable that certain of the other machines mentioned by the Ambassador may be released or replaced in the near future without serious injury to our national defense. I believe that the value of these machines may well amount to more than one million dollars.
In view of the above, I do not see how we can give the Ambassador any blanket assurance that all the machines accepted by Soviet purchasing agencies will be released.
I feel reasonably sure, however, that after examination by Colonel Maxwell and other interested officers of the list promised by the Ambassador, we will be able to release a considerable proportion of the “accepted” machines without serious damage to our defense program.