124.611/3–1848: Telegram

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


499. Saw Molotov this afternoon. Began by stating that because of housing shortage which has been subject of discussion with Foreign Office for several years, this mission has been gradually decreasing in strength and now, as result application customs exemption quota, it apparent further drastic reductions will have to be made. Study to this effect already completed and approved in principle, but before out is put into effect, on instructions of my government, I was approaching him in hope we might reach a quiet agreement which would enable each of us to maintain in the other country an adequate representation. On part of US this would consist of about 150 persons, and I assumed Soviet Union would want approximately its present representation in US less purchasing commission.1 Then said if Molotov considered agreement possible, US would require another building with about thousand square meters floor space and six additional apartments and would require approximately hundred percent increase in our customs exemption quota, with full exemption for official supplies, replacement parts, etc., and application of minimum rather than maximum [Page 823] duty charges against quota items insofar as this was practicable under Soviet law. On its part, US is of course prepared to continue most favored nation treatment which has heretofore been accorded representation of Soviet Union in US. Molotov replied he saw no reason why we should not reach some agreement. He said Soviet Government already considering customs matter as result our former representations and while law could not be changed nor could discriminatory rules be applied, it was recognized that some missions had larger functions than others and consequently required more personnel. There also was considerable elasticity in customs regulations which might well permit application of lower tariffs. He appreciated housing difficulties of mission and hoped we would also appreciate housing shortage in Moscow. He was not at the moment familiar with situation but if I would give him memo of our requirements2 it would receive prompt consideration and earliest possible decision. I asked specifically when such decision could be expected, stating it was important because of personnel questions which must be decided in relatively short time. He replied he was unable give exact date, but would guarantee it would be expedited and I would be notified immediately when decision was reached. My estimate is we will get a considerable increase in customs quota exemptions, minimum tariff on number of items and some additional quota free items. We will probably get the promise of the additional housing space we require and may gradually obtain it if we keep pressing. All this will take some time and of course the rents will be extremely high. In fact, I am sure all our rents will go up on July 1, and that by time we obtain space we need, including Leningrad Consulate,3 cost of Moscow mission will have assumed astronomical proportions, and I am glad I will not have to defend this before Congress and Budget Bureau. He was unusually pale and looked more tired than I have ever seen him. My guess is President’s speech4 has been subject of an all night session in Politburo.5 While not cordial, he was very polite and showed not the slightest sign of irritation or hostility. Assume in view of above we maintain status quo until we receive formal reply from Foreign Office.

  1. On the establishment of The Government Purchasing Commission of the Soviet Union in the United States, see Foreign Relations, 1942, vol. iii, p. 696, and footnote 72. By 1948 its activities and personnel were diminishing.
  2. Ambassador Smith sent a letter on March 20 to Molotov confirming their conversation of March 18, a copy of which was forwarded to the Department in despatch No. 281 from Moscow on March 22; not printed.
  3. On the withdrawal by the Soviet government of its permission for the opening of a United States Consulate General at Leningrad, see the note No. 156 dated August 24, from the Ambassador of the Soviet Union, Alexander Semenovich Panyushkin, p. 1049.
  4. An address by President Truman was delivered on March 17, 1948 to the Congress on the subject “Toward Securing the Peace and Preventing War.” For text, see Department of State Bulletin, March 28, 1948, pp. 418–420.
  5. The Political Bureau of the Central Committee of the Communist Party.