861.131/3–1050: Telegram

The Chargé in the Soviet Union (Barbour) to the Secretary of State


805. Embassy has given further consideration possibility and desirability instituting counter-measures with view to obtaining rectification exchange rate situation created by Soviet revaluation ruble (Embtel 729, March 2). No such measures likely to carry enough weight to obtain Soviet reversal of its position and at same time readily applicable have occurred to us.

However, in line with the thinking which underlies recommended reply to Vishinsky (Embtel 748, March 41), that it is in our interest to counteract the psychological effect of this Soviet move by manifesting the unrealistic nature of Soviet pretensions therein, we have been weighing the possibility that this might be a suitable occasion to abrogate the US–USSR commercial agreement proposed in Depinst 7 of February 2. Embassy’s reply to that instruction (Embdes 233, March 3) expressed view that it would be undesirable to abrogate that agreement until a suitable occasion arose on which to abrogate with positive advantage to US. Abrogation on basis Soviet establishment unrealistic exchange rate, accompanied by statement to effect that [Page 1121] agreement has been rendered obsolete by appreciation of ruble which makes impossible conduct commercial exchanges along normal traditional lines, would seem likely appreciably counteract psychological impact Soviet action and might startle Soviets as unexpected reaction touching their vital interest East-West trade. Also in these circumstances there would be no reason add offer negotiate new agreement which Embassy feels strongly would in any event be inadvisable.

  1. Not printed, but see footnote 2, p. 1117.