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

800.01b11 Registration/10–148

Memorandum by the Associate Chief of the Division of Eastern European Affairs (Hooker)¹

secret

[Washington,] September 1, 1948.

I understand that Peyton Ford, Assistant Attorney General, called Mr. Lovett yesterday and referred to a recommendation by J. Edgar Hoover² that the activities of Amtorg should be in substance transferred to the Soviet Embassy. This would amount to a reversal of the Department’s policy in accordance with which the Soviet Union was requested to transfer the activities of the Soviet Purchasing Commission to Amtorg.³ This transfer has been accomplished in substance, and the only employees of the Purchasing Commission who remain are a few who are winding up lend-lease accounting. The reason for wishing to close up the purchasing commission’s activities was because they enjoyed certain diplomatic privileges and immunities (the extent of which was never clearly defined) among which was immunity to suit. Amtorg was incorporated in the United States (New Jersey,⁴ I believe). It was considered to the interests of American businessmen that the Soviet Union’s commercial activities in this country should be carried on by an organization which would be subject to court action. If the activities of Amtorg were transferred to the Soviet Embassy, we would have in substance a reversal of this position with the result that the Soviet commercial activities would then be carried on by persons enjoying diplomatic status.

For your information I attach the only papers remaining in my file which deal with this subject. You will note that the policy of disestablishing purchasing commissions was not confined to the USSR, but that aide-mémoires were sent requesting the disestablishment of all of the the foreign purchasing commissions in this country. I would appreciate it if you would return the attached papers to me at your convenience.

Robert G. Hooker, Jr.

1. This memorandum was directed to William J. McWilliams, who was assistant to the director of the Executive Secretariat, Department of State.
2. Director of the Federal Bureau of Investigation, Department of Justice.
3. The Government Purchasing Commission of the Soviet Union in the United States had been appointed on February 27, 1942; see the memorandum of a conversation with Litvinov on March 2, and footnotes 71 and 72, Foreign Relations, 1942, vol. iii, p. 696. In 1946 the Department of State had begun the policy of asking for the disestablishment of wartime purchasing commissions on the part of those governments which had these missions. The text of the aide-mémoire originally sent on April 2 is printed ibid., 1946, vol. x, p. 1395, and footnote 1.
4. The Amtorg Trading Corporation, the official purchasing and sales agency in the United States of the Soviet Union chartered in 1924, and its predecessor the Produce Exchange Corporation (Prodexco), were apparently incorporated in New York.