The Ambassador in the Soviet Union ( Steinhardt ) to the Secretary of State
[Received 11:40 p.m.]
383. My 374, February 26, 5 p.m., and 381, February 27, 10 a.m.53 Copies of a French text of the Treaty of Commerce and Navigation and of the Trade and Payments Agreement referred to are being transmitted to the Department by pouch.54 The treaty is of 2 years’ duration and becomes effective upon the exchange of instruments of ratification in Bucharest. If not denounced 3 months prior to its [Page 293] expiration, it continues in force until denounced by either party on 3 months’ notification. An annex to the treaty establishes the status of the commercial representation of the Soviet Union in Rumania, which shall have its headquarters in Bucharest. Branches may be opened in other cities by agreement between the two countries, but no office may have more than five employees. The commercial representative of the Soviet Union and two assistants are to enjoy diplomatic privileges.
A so-called secret letter was also attached to the treaty, of which no copy was furnished me, but which my informant assures me relates to the extension to Rumania of transit rights through the Soviet Union all merchandise to be imported into Rumania from abroad, and as regards Rumanian exports only to Sweden. My informant further emphasized that Rumania was particularly interested in importing rubber from the United States via the Soviet Union.
The Trade and Payments Agreement is of 1 year duration and may be denounced 1 month before its expiration. If it is not so denounced, it remains in force automatically for another year until denounced on 1 month’s notification by either party. An annex to the agreement gives the list of goods to be exchanged under its terms as follows: Rumania shall provide the Soviet Union with 100,000 metric tons of gasoline, 1,200 tons of lubricating oils, 2,000 tons of caustic soda, and other goods, to a total value of $4,000,000. The Soviet Union shall furnish Rumania with 6,400 metric tons of cotton, 1,000 tons of cast iron, 500 tons of manganese peroxide 80 percent, and other goods, to a total value of $4,000,000. A protocol to the agreement states that the contracting parties intend to enter into separate contracts for the supply by Rumania to the Soviet Union of locomotives, locomotive and railway car tires and locomotive boiler tubes. These goods will be compensated for by exports from the Soviet Union to Rumania of scrap iron and cast iron necessary for the production of locomotives and of other goods outside the quantities set forth above sufficient to equalize the value of the locomotive tires and boiler tubes furnished by Rumania; and a secret letter is also attached to the agreement, of which no copy was furnished me, but which my informant states specifies the quantities of these goods to be supplied by Rumania to the Soviet Union as follows: 200 locomotives, 40,000 tons of locomotive and railway car tires and 20,000 tons of locomotive boiler tubes. Exactly what goods Rumania will receive in return has not yet been specified but my informant said that the foregoing quantities would bring the total trade turnover envisaged up to between 22 and 24 million dollars in each direction.
My informant stated that this delegation was well pleased with the agreement. They are leaving Moscow this evening by train for Odessa.