861.24/770
Memorandum of Conversation, by the Assistant Chief of the Division of European Affairs (Henderson)
The Soviet Ambassador called me up by telephone today. He said that he was constantly encountering troubles with regard to machine tools. During his conversation of January 8 with Mr. Welles he had presented certain proposals on behalf of his Government with regard to machine tools. Apparently the answer to these proposals has been further requisitioning on the part of American authorities. He would like to know what was the present situation with respect to his requests for the immediate release of certain machine tools and the replacement of others.
I told the Ambassador that his requests had been, and still were, the subject of discussions among the appropriate Government authorities; that they had raised a number of difficult problems; and that it was hoped that within a short time the matter would be sufficiently clarified for him to be furnished a definite reply. The Ambassador stated that he would appreciate it if I could give him some kind of indication as to the possibility of the Soviet Government obtaining the machine tools set forth on the list attached to his memorandum of January 8. I told him that although I was not in a [Page 698] position to give him a definite reply, I felt, however, from the information thus far available that it was likely that the Soviet Government would receive few, if any, machine tools on the list. Practically every tool listed had already been requisitioned or diverted to American use. So far as I could ascertain, there seemed to be only one machine contained on the list which might possibly be released to the Soviet Union. It was not possible to make a definite statement even with regard to this machine since there were still a number of uncertainties involved.
The Ambassador asked what was the situation with regard to List C. I told him that the appropriate authorities were still working on the matter. He inquired if the prospects were favorable. I told him that the needs of American defense were so great at the present time and the factories were so deluged with orders needed for the carrying out of the national defense program that in my opinion it would be extremely difficult for the Soviet Government to receive many of the tools contained on List C in the near future. I pointed out that most of the machines on that list which had been completed or were near completion had already been requisitioned or diverted, and that licenses had been refused covering some 61 machines in view of the fact that there was no prospect that the factories would be able to start production upon them in the near future. The Ambassador said that he was sorry to receive such bad news. I emphasized the fact that what I had to say was only of a tentative nature and a definite reply would be made later.
The Ambassador said that requisitioning is taking place so frequently that it was useless to discuss each case. He wished to mention particularly a diversion which had come to his attention. The machine tool in question was an automatic lathe press manufactured by Jones & Lamson. The export license number covering it was DC–3733. Under date of January 6 it was shipped by railway from the factory to Portland, Oregon, to be loaded aboard ship. While en route the machine was stopped upon an order issued by the State Department and diverted to an unknown destination. The license had not been revoked and so far as the Ambassador knew, the machine had not been requisitioned.
I told the Ambassador that I knew nothing about the matter. I was sure, however, that if the machine had been diverted, it had been done so in a legal manner and because of pressing defense needs.