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

811.20 (D) Regulations/1120b

Memorandum of Oral Statement Made by the Ambassador of the Soviet Union (Umansky) to the Under Secretary of State (Welles), January 8, 1941

[Extracts]

The Soviet Government notes with regret that its suggestions referring to the export of equipment from the United States to the Soviet Union, set forth in the memorandum of oral statement made by the Soviet Ambassador to the Under Secretary of State on October 7, 1940⁶⁵ have in substance not been accepted by the Government of the United States.

Instead of the suggested complete release of machine tools and other equipment already inspected and accepted from manufacturers by Soviet purchasing agencies, only 40.6 per cent of such equipment (in terms of its dollar value) has been licensed for export within the last three months. The remaining part of the inspected and accepted equipment, the total value of which is $1,238,140, has been requisitioned or diverted. In addition, accepted equipment to a total value of $1,857,120 has been requisitioned or diverted more recently.

Instead of acceptance of the suggested procedure of a businesslike agreement between the two governments for a voluntary and temporary relinquishment by the Soviet Government of a certain part of the industrial equipment being manufactured at the present time in the United States on orders of Soviet agencies, the appropriate Departments of the United States Government continue to adhere to their original refusal to issue export licenses for the main bulk of equipment for which orders have been placed with American manufacturers.

Instead of the suggested reciprocal consideration of the respective needs of the two countries, the appropriate Departments of the Government of the United States act in a unilateral fashion, and have responded neither to the suggestions of the Soviet Government concerning the renewal of contracts for delivery of equipment which the Soviet Government might deem possible temporarily to relinquish, nor to the Soviet Government’s suggestions as to the procedure of compensation for the delay in delivery of such equipment or of compensation in the event of abstention of the purchaser from renewal of contract.

The Soviet Government further notes that the Government of the United States, while making the abolition of the so-called “moral embargo” for the export of certain goods to the Soviet Union—which measure is entirely unjustified and, because of its unfriendly nature, is hindering the development of economic relations between the Soviet Union and the United States—dependent upon the conclusion of an agreement concerning the export of machine tools and other equipment, at the same time has not thus far opened the road to an agreement on the question of export of equipment.

Having in view the statements of Mr. Sumner Welles as to the desire of the Government of the United States to create a friendly atmosphere for the relations between the Soviet Union and the United States and desiring to reach an agreement upon the questions which have been under discussion between Mr. Oumansky and Mr. Welles, the Soviet Government states the following:

1. The Soviet Government is willing to cede to the Government of the United States five items of equipment, in accordance with the suggestion made by Mr. Welles to Mr. Oumansky on December 16, 1940,⁶⁶ i. e. items 5, 21, 22, 43, 54 of list “A”, as well as two items, 39 and 40, of the same list, for which licenses have been revoked (the total dollar value of this relinquished equipment being $897,728) and to receive compensation therefor in accordance with the procedure of compensation set forth in the Soviet Government’s suggestions of October 7, 1940.

2. This solution of the question of equipment would appear acceptable to the Soviet Government provided that:

a) All other requisitioned and diverted equipment enumerated in the attached list⁶⁷ be released and relicensed for export to the Soviet Union and that in particular, items 13, 14 and 15 of the attached list be promptly released (the total dollar value of this equipment being $2,197,532).

b) The Government of the United States guarantees the renewal of contracts for all equipment ceded by the Soviet Government and the execution of these contracts within a period of time acceptable to the purchasers.

c) The Government of the United States undertakes within the shortest possible time to revise the lists of non-licensed Soviet orders which have already been placed with American manufacturers (list “C”) and guarantees in respect to all orders, concerning which agreement as to their temporary relinquishment to the American Government shall be reached, the renewal of contracts under the same conditions as specified in paragraph b.

d) The Government of the United States undertakes to accelerate the procedure of examination by the President’s Liaison Committee of non-placed orders.

3. The Soviet Government is willing to sign the respective documents on questions about which agreement has been reached: namely, on the question of import of gold and silver from the Soviet Union to the United States and on the question of the availability of American tonnage for the purposes of Soviet-American trade. The Soviet Government does not consider it necessary to establish a connection between the signing of such documents and the reaching of an agreement on the question of the export of retained equipment.

4. The Soviet Government takes notice of the statements of the Government of the United States as to its intention publicly to revoke the so-called “moral embargo” in regard to the Soviet Union. The Soviet Government considers it self-evident that such public statement should not be made dependent upon the reaching of an agreement on the question of the export of equipment, and expects that the contents of such public declaration shall be agreed upon in advance with the Soviet Ambassador.

5. The Soviet Government authorizes Mr. Oumansky to proceed in cooperation with the Department of State to the drafting of an exchange of notes referring to the export of equipment from the United States to the Soviet Union.

6. Expressing its willingness to settle the current economic issues between the Soviet Union and the United States on the basis above set forth, in the interest of the normalization of trade relations between the two countries, the Soviet Government is at the same time compelled to state that it does not conceive a real adjustment of Soviet-American relations to be attainable without solution of the question of discontinuance of the activity of former Baltic missions and consulates in the United States and the return to the Soviet Union of ships, funds and other property of the Baltic Soviet Socialist Republics, retained in the United States. The Soviet Government deems it opportune to remind the Government of the United States that in the hitter’s official pronouncements and documents it repeatedly anticipated and looked upon as desirable the reunion of the Baltic republics with the Union of Soviet Socialist Republics (Russia).

It will suffice to recall the terms under which the Government of the United States, in an official statement by Mr. Charles Evans Hughes, then Secretary of State, extended recognition to the Governments of Esthonia, Latvia and Lithuania. In that statement, dated July 25, 1922, the Government of the United States “takes cognizance of the actual existence of these Governments during a considerable period of time”,⁶⁸ but reiterates its previous policy against, and the non-recognition of, “the alienation of Russian territory” and explicitly states that “this principle is not deemed to be infringed by the recognition at this time of the Governments of Esthonia, Latvia and Lithuania”.⁶⁹ (Papers relating to the Foreign Affairs [Relations] of the United States, 1922, Vol. II, pp. 873–874).

This principle, as referred to in the above quoted statement by the then Secretary of State, was repeatedly expressed by authorized representatives of the Government of the United States in earlier years and notably in the note of Mr. Bainbridge Colby, then Secretary of State, to the then Italian Ambassador at Washington, under date of August 10, 1920. In this communication Mr. Colby set forth that

“From the beginning of the Russian Revolution in March 1917, to the present moment, the Government and the people of the United States have followed its development with friendly solicitude and with profound sympathy for the efforts of the Russian people to reconstruct their national life upon the broad basis of popular self-government …⁷⁰ The United States maintains unimpaired its faith in the Russian people, in their high character and their future … The United States feels that friendship and honor require that Russia’s interests must be generously protected, and that, as far as possible, all decisions of vital importance to it, and especially those concerning its sovereignty over the territory of the former Russian Empire, be held in abeyance. By this feeling of friendship and honorable obligation to the great nation … the Government of the United States was guided in … its persistent refusal to recognize the Baltic States as separate nations independent of Russia.”⁷¹

These and similar official statements of principle, at no later time withdrawn, obviously formed the background for the important reservations attached to the above-mentioned statement of recognition of the former Republics of Esthonia, Latvia and Lithuania, by the Government of the United States.

The Soviet Government therefore considers that the references of the representatives of the Government of the United States to the latter’s established policy of non-recognition of territorial changes can not logically apply in this instance of the reunion of the Baltic Republics with the Union of Soviet Socialist Republics.

The Soviet Government lodges its most emphatic protest against the detention in ports of the United States of several ships of Latvian, Esthonian and Lithuanian registry.

United States authorities have refused the issuance of clearance papers to the masters of the respective vessels, who desired to proceed to their home waters.

[The part here omitted is concerned with descriptive details of the detention of five Baltic ships, about which complaints were made by the Soviet Union.]

The Soviet Government considers it most essential that all these Soviet vessels of Latvian, Esthonian and Lithuanian origin and their crews be promptly returned to their homeland, and firmly expects that the Government of the United States will undertake all necessary steps to prevent their further detention as well as their alienation and conversion to foreign registry and unauthorized sailing from American ports. The Soviet Government further expects that the Government of the United States will likewise promptly cause the restoration of those vessels, whose registry has already been changed in the above described irregular fashion, to the legitimate Soviet owners and registry. The Soviet Government finds itself under the necessity to call the attention of the Government of the United States to its full material responsibility to the Union of Soviet Socialist Republics for all damage arising from the detention, alienation, wastage and similar actions in regard to these ships and their crews.

Washington , January 8, 1941.

65. Not printed.
66. See memorandum by the Assistant Chief of the Division of European Affairs, Foreign Relations, 1940, vol. iii, p. 420.
67. Not attached to file copy.
68. In the original telegram this sentence continues: “and of the successful maintenance within their borders of political and economic stability.” Foreign Relations, 1922, vol. ii, p. 873.
69. In the original telegram the complete sentence reads: “The United States has consistently maintained that the disturbed conditions of Russian affairs may not be made the occasion for the alienation of Russian territory, and this principle is not deemed to be infringed by the recognition at this time of the Governments of Esthonia, Latvia and Lithuania which have been set up and maintained by an indigenous population.” ( Ibid., pp. 873–874) For the prior recognition by Soviet Russia of the independence of these countries in treaties concluded with them, see footnote 4, p. 710.
70. Omissions in this quoted passage are indicated in the original memorandum.
71. For an understanding of the meaning and purpose of the letter by Secretary of State Colby ( Foreign Relations, 1920, vol. iii, pp. 463–468) from which these extracts are taken (pp. 464, 465), the whole letter should be read.