Foreign Relations of the United States, 1969–1976, Volume XV, Soviet Union, June 1972–August 1974

84. Memorandum of Conversation¹

Moscow, March 14, 1973, 11 a.m.–2 p.m.

SUBJECT

• Shultz Meeting with Brezhnev

PARTICIPANTS

• Soviet
• L. I. Brezhnev
• A. M. Aleksandrov
• Victor Sukhodrev
• American
• George P. Shultz
• Helmut Sonnenfeldt
• Lewis W. Bowden

Brezhnev opened the conversation by asking whether this was not the Secretary’s first visit, and the Secretary replied that it was. When asked whether he had seen much of the city, the Secretary replied that he had and it was very interesting. Brezhnev said that Mrs. Shultz was probably seeing more and could tell him about it later.

Brezhnev said the Soviets attributed immense importance to the events of last May, which represented a turning point in our relations, though not everyone seemed to realize that. Indeed, Brezhnev said, when one thinks it over, one asks himself why between our two peoples there should be abnormal, unbusinesslike, and unfriendly relations. Of course, if one wants to he could find a thousand reasons for bad relations, but if one goes into these deeply the reasons are worthless. Therein lies the basic, immense importance of what has been accomplished.

Brezhnev felt that he and President Nixon had started to break down barriers between us that had existed in many spheres for a long time. He thought the May meeting had been well received by world public opinion. He thought we had made considerable forward movement since May, though unfortunately not all we had agreed to then had been accomplished. So far as the Soviet Union was concerned, Brezhnev said, they had been very serious and felt that everything should be carried out.

Brezhnev said that of course people evaluated the May events differently. We both had our friends and our foes. So far as he and his colleagues were concerned, however, they looked forward with optimism to the future as concerned our relations. Tell the President we will do everything we charted in Moscow, which we feel was the beginning of a great future between us. For long years there were tensions between us; there was the cold war; there were no good contacts between our businessmen and economic organizations. We should get down to the bottom of why that happened. The legacy of the past can be overcome, but it will require time.

Brezhnev said that last year he and the President had agreed that we would achieve our aims and that the improvement in relations between us would come faster if we worked harder at it. He noted their appreciation for the work already done by the President and the Administration to follow up the May commitments. He felt that after Congress approved the agreement, or agreements, he was not sure how many were involved, the road ahead would be easier for us to advance along.

At the same time, Brezhnev said we should also note the existence of objective factors which had facilitated an improvement in our relations. For example, the resolution of the Viet Nam conflict had clearly improved the atmosphere, as had approval of the Viet Nam agreements. There were also to be considered the more frequent contacts between our businessmen and people from the State Department and the White House.

Brezhnev characterized the meeting today as taking place at a time which was in effect a new phase in Summit contacts and clearly a further stage in the development of relations between us. So far as economic-commercial relations went, he felt it was natural that developed countries like the U.S. and the USSR should, with good will, find broad avenues for mutually beneficial cooperation. He stressed that he had made this point to the President. There was an additional consideration. That was that great countries like ours ought to have great big deals, even though one could not slight the smaller things between us in this field. He said that in the press one could see references to both of us as “superpowers” and to our efforts at cooperation. He thought that was really all to the good. He asked rhetorically whether we were to blame that we are great powers. History had made that happen. The USSR had almost 250 million people; the United States some 230–240 million. We both have enormous economic potential.

The trade agreement we had signed,² said Brezhnev, foresees a three-fold increase in trade between us but he pointed out trade must be a mutually advantageous undertaking. To take a simple example, he said, if I buy something from Sonnenfeldt, it is normal that he will make a profit of 10 to 15%. Then if I turn and sell it on my own market, I can also expect to earn maybe 10%. But if Sonnenfeldt wants to sell me something and ruins me that is no good at all. There must be mutual benefit.

Brezhnev said that in this connection, people had started to use a broader concept than merely “trade,” and that was the concept of “economic cooperation.” For example, many countries were interested in this kind of cooperation involving basic raw materials. In the case of the Soviet Union there were oil, gas, timber, non-ferrous metals and coal, just to name a few. Those who would be parties to such deals were interested, however, in long-term agreements. Short-term agreements were of no value because they could not be economically justified. It seemed clear that long-term agreements were more effective from both the economic and the political points of view. Among other things, such agreements would strengthen mutual confidence and raise the economic level of the participants. We are aware that President Nixon favors this type of relationship with the USSR.

Over the past year or so, Brezhnev continued, there had been much talk about Soviet gas; many countries were interested. Gas was one of the Soviet national treasures. He noted that clever people had found ways to make a great variety of things from this raw material such as fibers, a source of energy, and so forth. They would unquestionably find other uses for it in the future. Nearly 20 years ago there had been a much different view of the potential use of gas.

Seen against this background, it was not fortuitous that countries everywhere in Europe and Japan were pressing the Soviet Union all the time to deliver more gas. The United States was also interested, of course. Up to the present, Brezhnev said, the Soviets had done virtually everything themselves to develop their gas resources, especially in the laying of pipelines. Pipe itself had turned out to be the big problem. However, he felt that once the pipelines had been built for Europe the possibilities for selling gas were almost unlimited.

Brezhnev emphasized that he was speaking absolutely frankly. Even though the new pipelines could make a difference, the Soviets could not possibly satisfy all the demands that they were getting for more gas, both from other socialist countries and from Western countries. Only yesterday, for example, the Italians had pressed for more gas.

Notwithstanding these enormous demands on Soviet gas resources, Brezhnev said, the Soviet Union stood ready to share this national treasure in certain measure with the United States as a means of making our relations, which were already friendly, even stronger. It remained for the engineers, economists and businessmen on both sides to examine the technical and economic aspects and come up with accurate calculations respecting costs and so forth.

Brezhnev said at this point he thought that what he was about to say should not be made part of the record. From what his specialist told him, he felt that a trillion cubic feet of gas could be made available to the United States. This could mean deliveries over a period of 30 years. Outlays from the United States would be required in terms of equipment and other things. As a matter of fact, Brezhnev said, the reserves were probably even greater than now estimated, which would make it possible for us to think in terms of deals even longer than 30 years. Since the Secretary would be now directly involved with Soviet matters, he felt that this might give him food for thought.

Gas was only one avenue of possible cooperation however, Brezhnev said. Another possibility would be for the United States to deliver complete plants to the Soviet Union for the production of mineral fertilizers, cellulose, ores, etc. Under the concept of industrial cooperation, repayment for these complexes could be effected by deliveries of a portion of the output, say 10–15%, over a long period such as 20 years. The U.S. could then sell these deliveries in third countries if it so desired. Both in the areas mentioned and in others such as nickel and tin possibilities would be opened up for very broad cooperation between us.

This is not a remote idea, Brezhnev said. He could, for example, cite a recent agreement with West Germany for the construction in the USSR of a metallurgical combine for the production of steel through a process by-passing the blast furnace. The combine would operate on the basis of Soviet natural gas and West Germany would take in payment a part of the product of the combine. If such undertakings were possible with West Germany, then why not with the United States?

Brezhnev said we should be more energetic in finding fields of cooperation between us, because this would lay the foundation for building mutual confidence and respect. This was not only good for the matter at hand, it also would contribute to peace on our planet. This was an “epochal question” which could contribute in an immensely important way to political developments. He felt sure this was also President Nixon’s position, that is, the more we could resolve economic problems the more easily we could resolve political problems.

Brezhnev recalled that he and the President had discussed a Summit meeting in 1973, and the possibility that there could be such a meeting every year. Please tell the President he said, that we are firmly committed to this goal. If anything of a practical nature needs to be done to make that come about we should let him know.

President Nixon and he had also agreed, Brezhnev said, that Soviet-American relations could not be insulated from world events, since we both participated in those events and influence them, or at least should try to influence them. He personally was very happy to see talks going forward on strategic arms, the reduction of troops in Europe, and the good cooperation between our delegations in Helsinki on European security matters. At the same time, he could not help but observe that there were certain forces within the United States and outside who were attempting to spoil the relationship that had been developed. Despite these forces, we must both persevere to attain the goals we have set. Here Brezhnev said he wishes us to understand he was expressing the sentiments of the whole Soviet leadership and the government. At this point, Brezhnev said he would finish and let the Secretary talk. He apologized for having gone on at such length, noting that he had not talked with many Americans lately. The only one had been Armand Hammer, whom he termed an interesting man.

Brezhnev then added he had been informed about specific items which his people wish to buy with the U.S. credit. There were many interesting items. He mentioned this because he believed he and President Nixon had laid out plans last year which would bear fruit and therefore he was thinking ahead. [This seemed to imply an awareness that the talks on the credit were snagged.]

Brezhnev observed that if his colleagues had made Secretary Shultz suffer as he had then he would be tired when he got home after his long trip. He recalled, however, that the President last spring had also been tired and had still managed to do a lot of very important work in Moscow. He sympathized with the problem of fatigue but noted that he himself puts out a great deal of energy. Of course, for him this was easier since he was at home.

Secretary Shultz said he was happy to hear Brezhnev’s description of the unfolding of Soviet-American relations. He recalled very clearly how tired the President had been when he returned from Moscow but notwithstanding that the President had gone directly to Congress to report to it and the American people on his trip.³ He had conveyed very accurately the spirit of his meetings in Moscow and the message was warmly received by both Congress and the people. Brezhnev interjected here that the first meeting with the President had occurred in the office in which they were sitting and the Secretary said indeed the Kremlin was historic for many reasons, including that one. Brezhnev then wryly observed that everybody talked about the Kremlin this, the Kremlin that, much in the same way people spoke about the White House this and the White House that, but he thought this reflected the feelings people have about where the decisions are made and where criticism is to be directed.

Secretary Shultz said he had been many times with the President, sometimes alone, sometimes with Henry Kissinger and others, and heard him speak of his trip to the USSR and the relationship between our two countries. There was, he thought, a striking parallel between the President’s views and those Mr. Brezhnev had expressed. Brezhnev replied he was indeed happy to hear that since he had the freshest memory of their conversations. In fact, he recalled virtually every word. As he saw it, the big tensions between our countries and between the leaders disappeared in the course of their first meeting. This was a process that had continued since. It was not a matter of personal ambition, but he felt the personal relationships established were of the greatest importance for our two countries and should be brought to their logical conclusion.

Brezhnev then said he was not a diplomat, only a former engineer, but he would like to say that it was not an unimportant fact that the American people had reelected President Nixon to his second term by a great majority. This had come after his visit to Moscow and means that the American people approve of his line of cooperation with the USSR, though that of course was not a direct issue in the campaign. Secretary Shultz replied that was right and he believed it expressed the yearnings for peace throughout the world. The President’s visit to the USSR was the largest step that could be taken toward world peace. Clearly the American people were responding favorably to the move. Brezhnev commented that obviously plain people everywhere wanted peace.

Secretary Shultz observed that frequently in their talks the President had emphasized that economic-commercial relations between our two countries was an essential part of our broader relations, and not just a matter of day-to-day trade. The President was therefore seeking to develop things that have a longer-range significance, not only the economic aspects but other aspects as well. Here, the Secretary noted that we have restructured a part of our government to deal better with the USSR in the economic-commercial sphere. Also he would like to point out that he and Dr. Kissinger were and would be closely associated in the new structure when looking at economic relations with the USSR.

Brezhnev said with a straight face that turned into a smile that Secretary Shultz should tell Kissinger he very much welcomed cooperation between the Secretary and Dr. Kissinger but he, Brezhnev, hoped there would also be cooperation between the Secretary and the Soviets. But seriously, he continued, we are grateful for the coincidence of views between us and the President on the development of economic ties. The Soviets had noted our structural changes and that the Secretary had been invested with the noble task of heading it. “We know you enjoy the confidence of the President.”

Pensively, Brezhnev said that it was really impossible to over-estimate the importance of mutual confidence. We must both try in every way to develop and strengthen that, not allow it to be just a fleeting thing. As the Russians say, “There is no confidence without love.” Though the word “love” was not appropriate here between politicians, the confidence part was. So, now you go ahead and cooperate with Kissinger, whom I haven’t seen for some time. Perhaps I should send him a telegram and ask him why he hasn’t been telling me anything since he is dealing with the Soviet Union. You and he should tell me what you are saying about us! Turning serious again, Brezhnev said he knew Kissinger and knew that cooperation between him and the Secretary would be serious and fruitful.

At this point there was a humorous exchange, with the Secretary saying that if Sonnenfeldt was willing to sell something to Brezhnev for only 10 percent he was not sure he ought to be dealing with such matters. Sonnenfeldt remarked that he was supposed to get two percent commission from the Lend-Lease settlement⁴ and Brezhnev shot back quickly that that settlement was not yet in effect and might not be.

The Secretary then said he would like to say a word about the matter of confidence and our Congress where certain questions were already being debated. He would like to assure Brezhnev that the President was working hard on the problems relating to Congress and in the spirit which had been developed during his Moscow visit. But we do have serious problems with the Congress. The President was seeking various ways to break the log-jam created by attitudes in Congress. The Secretary said he had explained this matter in detail yesterday to Novikov and so would not go into it closely here.⁵ The important thing was to have confidence that the President was working to see that the agreements we signed would be carried out. He is working in the most arduous way and in the politically most sensible way.

Brezhnev then asked what was the Secretary’s evaluation of the spirit of the talks he had had with Novikov, Baybakov and Kuzmin.⁶ He commented all three were fully abreast of Soviet policy thinking. Secretary Shultz replied he had received a great deal of information from Baybakov about the planning process and about the relationship between planning the internal economy and foreign trade. The explanations had been very helpful. With Novikov, the Secretary said, there had been a fruitful two-way exchange on the organization of work between us in the economic field, on matters relating to oil and gas, the question of MFN status for the USSR, and to a lesser extent on agricultural matters and the desirability from both our standpoints for early information about any Soviet grain purchases so we could plan our planting and our transport arrangements. In general, the Secretary said all the conversations with Soviet officials had been useful and their general tone had been constructive, especially the talk with Novikov.

Brezhnev commented that Novikov, Baybakov and Kuzmin were very well informed on economic-commercial matters, were close to the Soviet leadership and knew their opinions and the nuances of policy. Novikov was perhaps the most competent person in the foreign economic field in his capacity as a deputy to Kosygin dealing on a daily basis with economic matters. These three men accurately reflect Soviet positions on policy.

Brezhnev said he had had a conversation with Novikov just before the Secretary and his party went to the Bolshoi Theater and been filled in on their talk. As concerned business facilities in Moscow, Brezhnev said Novikov had already spoken to people about the establishment of permanent trade missions between us, and that he supported this idea.

With respect to agriculture, Brezhnev said there was really not much he could tell the Secretary at this time but he would like to assure him that a constructive solution to that question (advance knowledge of purchases) would be found and they would let us know. Brezhnev said he was convinced that we did need to coordinate these matters between us rather than continue in the hit-and-miss way we have had before. Both our economies require planning and we should go down the road of better coordination. As of now, he said, they could not give us an absolute figure but should be able to come up with more or less realistic figures for maybe the next five to ten years.

Secretary Shultz commented it was hard to be exact where nature’s whim played such an important role but we did need some figures for planning various things on our side. He told Brezhnev that the Soviets could pass any information they consider highly confidential to us with assurance that it would not leak out. Brezhnev said that was indeed the spirit in which he informed the President of various matters. In fact, that was an important aspect of our relationship. He thought that recently the passing of information between us had been improving.

Secretary Shultz said he would like to return to gas. We realized that this subject was of deep significance to both countries. It involved a long term, a large scale, required mutual confidence, and had mutual benefit. Brezhnev commented that the latter aspect was essential since otherwise our businessmen would not go for it, nor would the Soviets. But Brezhnev thought their and our experts would be able to calculate quite accurately who would get what benefit and what the proper time-frame should be. From what he understood, 30–40 years seemed to be indicated. It might be difficult for us all to live to see the ultimate fruit of such long-term agreements. In any event, he thought it would be difficult for him personally though he would certainly like to live that long. He said his 87-year old mother lives in Moscow and is now looking forward to her 90th birthday. She has a great interest in things, sees movies, and watches television, and is always full of lively comments on things. Brezhnev hoped he would be the same at her age.

The Secretary said he shared Brezhnev’s assessment of the gas outlook. There were many technical questions to be solved and the economic aspects must be carefully examined. We already know, however, what the general future demand picture for a clean energy source like gas is likely to be. The possibilities here are of great promise. While recognizing the uncertainties, we are ready to tell our companies, especially those involved in the “North Star” project that the United States Government has no objections to their going ahead with their studies, which we hope will have a successful outcome.

Brezhnev said that at a recent official conference with the Siberian oil people and various ministers he had heard that the reserves in the area under discussion amounted to some 20.5 trillion cubic meters. This amount was already proved out and more reserves were being discovered all the time. Under certain conditions, therefore, the Soviets could talk to us about even larger amounts of gas than were mentioned earlier. It was now up to the specialists to make their fine calculations. Brezhnev said he understood there were problems of a technical nature such as high pipe-pressure, laying pipe on the sea bottom and so forth, but he thought the specialists would solve those. He personally was more interested in the political aspect of the projects under discussion because this was the real meaning of such a long-term relationship between us in the economic field.

Secretary Shultz replied that was very well put. In fact, it seemed to him that there was a kind of parallel between the ever-expanding gas reserves Brezhnev had mentioned and the expanding possibilities for our relationship. Brezhnev said that was right, that was the scale they were thinking about. As regards quantities, selling the US 300 million cubic feet was peanuts. (At this point, Brezhnev autographed three photographs which had been taken at the outset of the meeting and later handed them over to the Secretary.)

The Secretary said he wanted to say one further word about our problems in Congress with the MFN issue. He had given Novikov a very detailed explanation about the possible strategies. We would keep Dobrynin informed on how we see the process unfolding. We have given this background so that you will understand the processes involved and, to the extent possible, you will in your own activities see the relationship to the way in which matters go forward. (This latter part was at first incorrectly translated and Mr. Sonnenfeldt asked that the interpreter render it exactly. This was done.)

Brezhnev said he had said at the outset that he was happy to hear any advice of what the President thought they (the Soviets) could appropriately do within their possibilities. He had to be cautious because he realized this was a U.S. internal matter. He added that they would take no steps without the President’s consent. So far as the agreements of last year were concerned, the Soviets felt duty bound to do everything necessary to carry them out. It was no secret that this was fully in our interest, meaning by this our common interest. The Secretary commented that was a very helpful statement and repeated his assurance that we would keep Dobrynin informed.

Brezhnev asked the Secretary to give the President his and his colleagues’ best regards. They all wished him the best of health and success in his activities, especially as regarded progress on our agreements and in developing other areas of our future relations. Brezhnev underscored the very important stage in our relations at which we now find ourselves.

Secretary Shultz remarked that the two preceding nights he and his party had seen excellent performances in Moscow which pointed up the importance of doing things to the best of one’s ability. He would like to present to Brezhnev a small gift which represented the fine work done by the Steuben company, which was well known for its glass objects. Since the gift was a horse’s head, perhaps the General Secretary could use it to play chess. Brezhnev replied he used to play chess but had no time now. He promised to keep the little glass horse’s head on his desk at home. He said the Secretary had caught him unawares but he would find something for him. Brezhnev made a parenthetical remark on the very wide uses of glass, from plates in windows to the finest art objects. Mr. Sonnenfeldt commented that the Secretary might have to make 31 more visits to the USSR to bring Brezhnev the remaining pieces for a complete chess set. Brezhnev immediately quipped he would support the Sonnenfeldt line and that indeed the Secretary must come back to Moscow. There was much planning to do.

Brezhnev then asked whether the Secretary would be returning directly to the US from Moscow. Secretary Shultz replied he would be stopping in Bonn, then in Paris where a large meeting of Finance Ministers would be held Friday on international monetary arrangements.

Brezhnev asked the Secretary to tell the President he has received a message from the Japanese Prime Minister. It was a calm, businesslike message on relations between Japan and the USSR in which the Japanese suggested a new round of conversations on a peace treaty. These would follow up those started by Gromyko in Tokyo last year. Brezhnev stressed that the message had nothing to do with any third country but was confined to questions of general relations between the USSR and Japan, including references to their desire to develop further economic relations in the fields of oil, gas, and other resources. Brezhnev said he would soon tell the President in detail about this message through Dobrynin but wanted Secretary Shultz to be informed now on the general contents. He said he had told the Japanese Ambassador he agreed to such discussions and would plan to answer the message in the near future, with a suggestion that an appropriate time be arranged through diplomatic channels.

Brezhnev said he hoped the Secretary would find solutions to the problems to be discussed in Paris. He also asked vaguely about the talks between the U.S. and the GDR on the establishment of diplomatic relations.⁷ (This was not pursued.)

Secretary Shultz said there was no problem with the Soviet press release which Mr. Aleksandrov had handed to Mr. Sonnenfeldt. He continued that he would be meeting the press before leaving Moscow and would brief them in general terms about his reception but would not tell them what the Soviet side had said because it was their privilege to release that.

After everyone had got up from the table, Brezhnev took the Secretary over to a large plaque (about 6′ × 4′) resting on a stand. He explained that the plaque had been made of various kinds of wood by people on the island of Sakhalin in honor of the 50th anniversary of the formation of the USSR. The Secretary commented it was an unusual piece of work. Thereupon, Brezhnev went into the next room and returned with a portrait of himself (about 3′ x 2′) done in the same wood-mosaic style. He explained how the work had been put together and seemed obviously pleased with it. Brezhnev then disappeared with his portrait and returned with a color-photograph blow-up of President Nixon and Kosygin signing an agreement last May, with himself in the center of the picture. Mr. Sonnenfeldt observed that neither Kissinger nor he was visible in the photograph though they had been present. He joked that they had been purged from the Photo but Brezhnev only smiled.

After a brief leave-taking, the Secretary and those accompanying him departed.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 495, President’s Trip Files, Dobrynin/Kissinger, Vol. 15. Secret; Sensitive; Eyes Only. Brackets are in the original. The meeting took place in Brezhnev’s office at the Kremlin. Shultz was in Moscow to brief the Soviets on the trade bill. On March 23, Sonnenfeldt forwarded the memorandum of conversation to Kissinger under a covering memorandum, which Kissinger initialed.
2. See footnote 4, Document 14.
3. On his return from Moscow on June 1, 1972, the President spoke at 9:40 p.m. to a joint session of Congress at the Capitol. The address was broadcast live on radio and television. See Public Papers: Richard Nixon, 1972, pp. 660–666.
4. See footnote 2, Document 65.
5. In a memorandum to Nixon, March 15, Shultz summarized his meeting with Deputy Premier Ignatiy Trofimovich Novikov: “I set forth in detail possible strategies we might pursue on MFN, described our new organizational arrangements on trade relations, reviewed the agricultural picture and informed him of our readiness to let gas companies proceed with further feasibility studies, though without commitment on our part with respect to eventual financing and pricing policies. Novikov showed intense interest and reacted positively throughout. I believe relationship with him will prove useful over time.” (National Archives, Nixon Presidential Materials, NSC Files, Box 495, President’s Trip Files, Dobrynin/Kissinger, Vol. 15)
6. No record of Shultz’ meeting with Nikolay Konstantinovich Baybakov, Deputy Chairman of the USSR Council of Ministers, and Deputy Minister of Trade M. R. Kuzmin, was found.
7. Diplomatic relations between the United States and the GDR were established on September 4, 1974.