Foreign Relations of the United States, Diplomatic Papers, 1941, General, The Soviet Union, Volume I

860D.85/75

Memorandum by the Acting Chief of the Division of European Affairs (Atherton) to the Under Secretary of State (Welles)

[Washington,] August 1, 1941.

Mr. Welles: In pursuance of your authorization given sometime ago, members of this Department on several occasions have advised members of the United States Maritime Commission that in the opinion of this Department it would be to the interests of the United States for the American Government to take over the Baltic ships in our ports or operating from our ports.

The Maritime Commission has not as yet taken any of these vessels, although three of them until recently have been lying idle in American harbors as the results of lawsuits which have been holding them up for more than a year. It is understood that two of these three vessels are now being put into operation since the representatives of Amtorg⁹⁰ have in every instance lost the libel suits, the primary purpose of which has been to cause financial embarrassment to the operators of the vessels or to the representatives of the Baltic States who were endeavoring to prevent them from falling into Soviet hands.

We believe that these vessels should be taken over by our Government without further delay and hope that you will find it possible to urge Admiral Land⁹¹ to take steps in that direction.

The following are some of the reasons prompting the recommendations made above:

1. At the present time the utility of these vessels is curtailed in view of the fact that we cannot permit them to go into Latin American harbors flying the flags of the Baltic countries since there is a possibility that they may be there subjected to lawsuits and detained with a corresponding loss of their usefulness of the ships and cargo to us.

2. The status of these vessels at present is extremely unsatisfactory. There appears to be constant friction between the operators and the officers and members of the crews of the ships. The operators say that they find it impossible in some instances to get rid of certain insubordinate members of the crews because under our immigration laws they are not permitted to discharge them; there seems, therefore, to be certain danger that at some time a serious incident may arise as a result of mutiny or of the careless manner in which the ships are being handled.

It would appear that disgruntled members of the crews, on the other hand, are charging that operators are taking advantage of their position to enrich themselves by devious means at the expense of the vessels. It is clear that there is considerable opportunity for petty graft and profiteering on the part of persons connected with the handling and repairing of the ships as a result of a lack of proper control over all the parties concerned.

4. There is constant friction between some of the Baltic Missions and the operators. The Latvian Minister, for instance, is insisting that in accordance with Latvian law, the Latvian vessels shall be under the command of Latvian masters and some of these masters and the operators do not trust each other. Furthermore, some of the Baltic Missions in order to defend their rights to the vessels are being compelled to hire lawyers and are demanding that the operators pay these lawyers since they, themselves, do not have funds to protect the vessels. It is felt that sooner or later there may be incidents which will result in disagreeable publicity if not in a scandal.

5. The vessels flying the Baltic flags and manned in whole or in part by Baltic crews continue to be centers of intensive propaganda and intrigue by American and other Communists in our ports.

It would appear that one of the reasons why the Maritime Commission is hesitating to take the vessels is because they are continuing for the most part to operate and are useful to an extent^* in carrying defense goods between British (Canadian and Colonial) and American ports in this Hemisphere. They hesitate to take vessels which are not tied up in American harbors. It would appear to us that it would not be difficult to find means of tieing up these vessels for a short period in order to permit our Government to take them over under existing legislation.⁹²

R[ay] A[therton]

90. Amtorg Trading Corporation, official purchasing and sales agency of the Soviet Union in the United States, 210 Madison Avenue, New York 16, New York.
91. Rear Adm. Emory S. Land, Chairman of the United States Maritime Commission.
92. They frequently nevertheless make one-way trips under ballast. [Footnote in the original.]
92. Mr. Atherton added the following note: “In the developing situation it may be helpful not to have these ships under Baltic flags to avoid long drawn out friction with the Soviets.”