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

611.6131/590: Telegram

The Chargé in the Soviet Union (Thurston) to the Secretary of State

Moscow, July 31, 1940—9 a.m.
[Received 1:40 p.m.]

937. Embassy’s telegram No. 936, July 30. The documents comprising the Soviet draft proposal for the 1940–41 commercial agreement follow:

(a) A letter to be addressed to me by Mikoyan in the following terms:

“Mr. Chargé d’Affaires, in accordance with the conversations which have taken place I have the honor to confirm on behalf of my Government the agreement which has been reached between the Governments of our respective countries that the agreement regarding commercial relations between the Union of Soviet Socialist Republics and the United States of America recorded in the exchange of notes of August 4, 1937, between the People’s Commissar for Foreign Affairs of the Union of Soviet Socialist Republics and the Ambassador of the United States of America, which came into force on August 6, 1937, on the date of approval thereof by the Council of People’s Commissars of the Union of Soviet Socialist Republics and proclamation thereof by the President of the United States of America and which was renewed on August 5, 1938,⁶⁶ and August 2, 1939,⁶⁷ shall continue in force until August 6, 1941.

The present agreement should be approved by the Council of People’s Commissars of the Union of Soviet Socialist Republics and proclaimed by the President of the United States of America.”

(b) A letter to be addressed by me to Mikoyan in the following terms:

“Mr. People’s Commissar, during the conversations which have lately taken place with respect to prolonging until August 6, 1941 the operation of the Commercial Agreement of August 4, 1937 between the United States and the Union of Soviet Socialist Republics, there was a discussion of difficulties in Soviet-American trade which have arisen in connection with the entrance into force of the law of July 2, 1940 concerning the control of exports of materials necessary for national defense.

Referring to these conversations, I have the honor on behalf of the Government of the United States of America to inform you as follows:

(1) For the facilitation of trade between the United States of America and the Union of Soviet Socialist Republics the Government of the United States of America shall consider favorably applications of firms for licenses for export to the Union of Soviet Socialist Republics of the goods subject to the provisions of the law of July; 2, 1940. Furthermore, the Government of the United States of America undertakes to grant to such firms in each individual case irrevocable export licenses before the transaction is concluded and not to impede in any way the export of goods manufactured or sold by the firms to the Union of Soviet Socialist Republics under the above-mentioned licenses.

(2) The goods purchased or ordered in the United States of America by the Amtorg Trading Corporation or by Soviet economic organization[s] prior to the entrance into force of the law of July 2, 1940, concerning the control of exports of materials necessary for national defense shall not require any licenses whatsoever for their export to the Union of Soviet Socialist Republics and the Government of the United States of America shall not in any way impede the export of the said goods to the Union of Soviet Socialist Republics.

(3) The Government of the United States of America shall take the necessary measures to the end that the appropriate organs facilitate the chartering of American vessels by Soviet or American economic organizations for the transportation of exports from the USSR, and of imports into the USSR and to the end that in each case these organs without hindrance permit the chartering of American vessels for shipments from the USSR into the United States of America and from the United States of America into the USSR, if the existing procedure in the United States of America shall require that such permission be granted.

(4) The Government of the United States of America shall not apply to orders or purchases of goods for the USSR, as well as to the export of such goods from the United States of America, any measures which have a discriminatory character with respect to the USSR, in particular the so-called ‘moral embargo’.”

(c) A letter to be addressed to me by Mikoyan as follows:

“Mr. Chargé d’Affaires, in reply to your inquiry regarding the intended purchases by the Union of Soviet Socialist Republics in the United States of America in the course of the next 12 months, I have the honor to inform you that the economic organizations of the Union of Soviet Socialist Republics intend to buy in the United States of America in the course of the next 12 months American goods to the value of $40,000,000 or more.

Nevertheless, the Soviet Party, having in view the existing restrictions in the United States of America affecting the export of goods from the United States of America, cannot guarantee the abovementioned value of its purchases in the United States of America. The value of the purchases of the USSR in the United States of America can reach $40,000,000 or more only under conditions in the United States of America which are entirely favorable for imports of the USSR from the United States of America as well as for exports of the USSR to the United States of America.”

And (d), a letter from me to Mikoyan stating:

“Mr. People’s Commissar, with reference to paragraph 7, sentence 1 of the Commercial Agreement of August 4, 1937, the Government of the United States of America explains that it will not take with respect to the Union of Soviet Socialist Republics any measures prohibiting or curtailing exports or imports of gold or silver which shall not be applied with respect to all other countries.

In any case, in view of the adverse balance of the USSR in Soviet-American trade, Soviet economic organizations will be permitted, directly or through the State Bank of the USSR without hindrance to import gold into the United States to the amount necessary for all their payments in the United States.

The Treasury of the United States will purchase the above-mentioned amount of gold from the Soviet economic organizations or from the State Bank of the USSR.”

Thurston

66. Executive Agreement Series No. 132, or 53 Stat. (pt. 3) 1947.
67. Executive Agreement Series No. 151, or 53 Stat. (pt. 3) 2404.