Foreign Relations of the United States, 1948, Eastern Europe; The Soviet Union, Volume IV

611.6131/8–2548: Telegram

The Ambassador in the Soviet Union (Smith) to the Secretary of State

secret

Moscow, August 25, 1948—4 p. m.

1751. While I am aware that our government is intensively occupied with the problem of guaranteeing future US requirements in strategic materials, I now believe that we must give prompt and most serious consideration to possibility USSR may take action in near future to prohibit exports to USA (and possibly to Western Union countries) of manganese and chrome ores. It seems to us that recent Soviet press hints on the above subject can be regarded as laying base for such an export ban. (Embtels 1625, August 14, 1693, August 20 and 1738 August 24.¹)

As is made clear in these press items, ostensible and publicized basis for such action would be alleged US violation of commercial agreements with USSR. In our opinion, however, this would be secondary factor, and timing of such action would depend rather upon achievement of satisfactory level of Soviet stockpiling of such essentials as rubber, wool, and tin, supplies of which might be cut off by direct or indirect US reprisals. As Soviets seriously hampered by our recent export controls in filling their primary machine import requirements they will continue to add to US strategic stockpiles only: a) for that period necessary to protect procurement their own strategic needs for three-four year period; and b) to extent that exchange necessary to implement their stockpiling and foreign political program is not provided by grain shipments all over world and of export of essentially luxury items to US.

In light of above, I must advise not only intensification of our own preparations to meet such an eventuality but exertion of every immediate effort toward obtaining recognition of the problem by western governments, full information on Soviet foreign economic movements over next few months, and agreement on coordinated present and future policy for counteraction to prevent or delay Soviet accumulation of these essential imports.

While we regard existence or non-existence of commercial accord as relatively unimportant, its denunciation by USA might of course be used as excuse for imposition of export ban by Soviet Government, if latter were otherwise more or less ready to take such measures. Therefore, this possibility should be carefully weighed in considering possible denunciation on our part (Embtel 1588, August 11²).

Would appreciate latest information progress our stockpiling these ores this year and quantity of shipments from USSR delivered to date and balance expected this year.

Smith

1. None printed.
2. Not printed. In a memorandum of June 7, 1948, to Francis B. Stevens, Acting Chief, Division of Eastern European Affairs, not printed, George E. Truesdell, Division of Eastern European Affairs, pointed out that the U.S.-Soviet Commercial Agreement of 1937 left the United States open to charges of violation, and he suggested a basis for its termination (611.6131/6–748). In a memorandum to Stevens, dated July 7, 1948, George F. Kennan, Director, Policy Planning Staff, stated that he saw no objection to the termination of the agreement on the basis suggested to Stevens (611.6131/7–748).