The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received 9:25 p.m.]
535. Department’s 287, March 12, 6 p.m. The question of flax shipments to the United States was discussed this afternoon by a member of the Embassy staff with Krutikov,69 a Vice Commissar of the People’s Commissariat for Foreign Trade. Krutikov professed ignorance of the situation which was outlined to him on the basis of the [Page 916] Department’s telegram. He stated that he would look into the matter following which a further interview could be had after a few days. He asked that in the meantime the Embassy endeavor to ascertain the quantities desired by the American importers for immediate commitment or over a given period. He inquired at the same time whether a concrete transaction would be involved. With regard to the difficulties experienced to date he said that without definite knowledge he assumed they might have been occasioned by an absence of lots for shipment when tonnage was available or an absence of tonnage when lots for shipment were available.
Krutikov expressed the opinion that it would be difficult to arrange for shipments from Vladivostok because of the long rail haul, flax being grown in the western part of the Soviet Union, and stated that it would be much preferable from the point of view of the Soviets, provided he finds that there is an exportable quantity of flax and a transaction could be entered into, if shipment from Murmansk could be arranged.
While intimating in this preliminary conversation that there would be no objection to exporting flax to the United States if quantities are available for export he said that he made this statement “without obligation on his part” and added that the Soviet Union’s requirements were large. He repeated that the matter might hinge on the quantities desired and that he would investigate “taking into consideration the wishes of the American importers and the capacity of the Soviet Union to meet them” and also problems of transportation. When he was reminded that Soviet production was substantial and that the known commitments to Germany left an apparent export surplus available on the basis of the most recent foreign trade statistics which have been published he replied that the Soviet-German agreement70 had nothing to do with the matter.
In emphasizing the difficulties from the Soviet point of view of attempting to arrange deliveries from Vladivostok Krutikov also asked the Embassy to endeavor to ascertain whether the American buyers could arrange for tonnage from Murmansk.
Upon receipt from the Department of the information desired by Krutikov as indicated above a further interview with him will immediately be sought.