32. Telegram From the Embassy in the Soviet Union to the Department of State0

1967. Department pass Secretary Commerce. Embtel 1958.1 Following are highlights of Hammerʼs conversations with Soviet officials:2

Re US prohibition crab meat imports: Both Mikoyan and Khrushchev stressed US inspection to resolve “slave labor” issue out of question but would permit Hammer or other “tourists” to visit and see for themselves no slave labor employed. Clear implication this intended as way out of impasse and that Soviets would expect “tourists” to report their findings to US Government.
Mikoyan intimated he might welcome meeting with Secretary of Commerce as a step toward improved economic relations. However, both he and Khrushchev appeared reluctant to take the initiative.
Khrushchev stated he had already given order to settle lend-lease debt (prior to January 1960 discussions). “Just treat us as you did the British and we will be satisfied.” He clearly stated this meant assurances that credits would be forthcoming following agreement on lend-lease debt. Mikoyan had stated that negotiations regarding credits and a trade agreement should parallel discussions for lend-lease settlement. Mikoyan also said USSR prepared to place orders for one billion dollars if credits can be arranged. Both Mikoyan and Khrushchev revealed their expectation that present US recession would be factor prompting us to seek expanded trade with USSR. They realize, however, that lend lease settlement and matters requiring legislation (credits, MFN) will take time. Mikoyan said that in any event substantial trade could be carried on with us on cash basis.
Mikoyan and Ministry of Foreign Trade officials took same line saying three things need to be done to improve trade relations:
Soviet buyers must have assurance that contracts will be honored without interference (e.g. license revocation) by US Government.
USSR must be able to sell products with minimum of restrictions (need for MFN). Agreed Soviet products must be geared more effectively to US market.
Better psychological atmosphere required among US businessmen. Must want to seek Soviet trade. General attitude of US Government important this respect. Export license determinations on borderline decisions also major factor.
Throughout all discussions Hammer had clear impression Soviets eager to expand trade with US. Hammer stressed in discussions that improvement in economic relations would take time. Soviet officials in all three conversations recognize this and appeared to accept as fact to which they must accommodate.
Hammer suggested to Mikoyan and Khrushchev that USSR send representative selection from its art treasures to US for exhibit—particularly selections from Hermitage. Also suggested that Eleanor Roosevelt could be appointed chairman of committee to arrange undertaking and that he believed exhibition could open at National Gallery in Washington followed by exhibits other large cities. Khrushchev said this an excellent idea and asked Hammer to prepare plan for carrying it out. He said he would give orders to Zhukov to work out arrangements with Embassy Counselor for Cultural Affairs after Hammer had submitted plans. Hammer intends to prepare plan after consultation in US.
Hammer stated to Soviets that he preferred no publicity and none has been observed. While general activities known to some members [Page 81] Embassy staff, no evidence that foreign correspondents here yet aware his visit.
Hammer had intended round world trip. In light these conversations plans to return to Washington early next week for report to Secretary of Commerce and Senator Gore. Would also like to talk with Ambassador Thompson. One copy each of memos of conversation personally being carried to Washington by Hammer at his insistence. No classification marked on these copies.
Embassy Economic Counselor accompanied Hammer on introductory visit to Ministry of Foreign Trade. No Embassy officer present at meetings with Mikoyan and Khrushchev.
  1. Source: Department of State, Central Files, 032 Hammer, Armand. Confidential; Priority; Limit Distribution.
  2. Telegram 1958, February 17, reported that Armand Hammer, President of the Occidental Petroleum Corporation, had arrived in Moscow as a private citizen, but at the request of the U.S. Secretary of Commerce was looking into the possibilities of expanding U.S.-Soviet trade. (Ibid.)
  3. Memoranda of Hammerʼs conversation with V.M. Vinogradov, in the Ministry of Foreign Trade on February 14, and with Mikoyan on February 15, were transmitted as enclosures to despatch 558 from Moscow, February 17 (ibid.); a memorandum of Hammerʼs conversation with Khrushchev on February 17 was transmitted as an enclosure to despatch 563 from Moscow, February 21 (ibid.). A copy of his report on the trip to the Soviet Union is attached to a letter from Secretary of Commerce Hodges to Secretary of State Rusk, March 3. (Ibid.) For Hammerʼs own account of the background to the trip and his conversations with Soviet officials, see Hammer, pp. 312-328.