Foreign Relations of the United States: Diplomatic Papers, 1942, Europe, Volume III

611.6131/649½

Memorandum by Mr. Elbridge Durbrow of the Division of European Affairs

[Washington,] October 28, 1942.

Discussion of Interdepartmental Committee on Commercial Relations with the Soviet Union—October 23, 1942

The entire meeting which lasted over two and one-half hours was devoted to minor criticism of the proposed draft progress report to be submitted to the Trade Agreements Committee. A copy of this draft, which was drawn up by the chairman of the Committee,³ is attached.⁴

Most of the discussion dealt with minor suggested changes in the wording and a basic discussion of whether an effort should not be made to negotiate a new type of trade agreement with the Soviet Union more in line with the trade agreements with capitalist countries.⁵

During the discussion of the latter point it was brought out that because of the unusual economic system in the Soviet Union and because of the monopoly of foreign trade it would be difficult if not impossible to negotiate a treaty based upon a “representative period” or other criteria used in trade agreements with capitalist countries

In view of this conclusion the question was raised as to whether, in view of the very small concessions which the United States could offer to the Soviet Union, it would be advisable to attempt at this time to negotiate a new agreement with that country. In this regard it was pointed out that since no one could predict at this time the economic and financial situation which would obtain after the conclusion of hostilities, it might be to the disadvantage of the United States if it should tie itself down in a trade agreement with the Soviet Union now.

I concurred that because of the very few concessions which might be accorded to the Soviet Government at this time it might not be advisable to endeavor to negotiate a new treaty, I pointed out, however, that it might be advisable from the point of view of expressing our good will and determination to foster Soviet-American trade by all means possible, but that because of the small concessions which could be granted to the Soviet Government the latter might not fully understand why the United States was so anxious to negotiate a new treaty at this time. Furthermore, since by far the largest amount of trade with the Soviet Union at this time is purely war-time trade, the Soviet authorities might feel that it would not be worthwhile to try to enlarge upon the present agreement which would have little effect on the actual present trade and might tend to obscure the issue of all out aid to the Soviet Union.

In connection with the possibilities of substantially increasing Soviet-American trade, considerable discussion took place on the question of credits. It was agreed that one of the principal means by which the Soviet Government could pay for increased imports from the United States would be credits, and that since the Committee was not primarily charged with the duty of working out a credit system, it was agreed that further importance in the progress report should be given to this point in order that the Trade Agreements Committee could judge more accurately the basic problem confronting any attempt to increase substantially trade between the two countries.

It was agreed that the chairman should incorporate the principal suggested changes in a new proposed progress report and that the recommendation of the Trade Agreements Committee should still be to the effect that an attempt should be made to negotiate a new trade agreement with the USSR.

3. Charles Bunn.
4. Not printed.
5. In the tentative final draft progress report of this committee, dated October 29, 1942, the observation was made that in the commercial agreements reached with the Soviet Union to 1941, generally an accompanying note from the Soviet Government specified in terms of dollar values the minimum amount of American goods and products which it intended to purchase during the year covered by the agreement. “Between 1935 and 1937 consideration was given by this Government to another type of commitment on the part of the Soviet Union, namely, that it should agree to purchase in the United States each year not less than a stated percentage of its total imports. Such a proposal was never made to the Soviet Government.”