361.11 Employees/373
Memorandum of Conversation, by the Assistant Chief of the Division of European Affairs (Henderson)
Mr. Max B. Miller, of the Max B. Miller Corporation of New York City, flew down from New York this morning in order to discuss certain problems connected with the lubricating oil plant which his firm is building for the Soviet Government in Batum, the chief Soviet Caucasian Black Sea port.
Mr. Miller said that he wished to ask my advice as to what steps he should take with respect to recalling his technicians from Batum. The plant had already been completed, but apparently the Soviet authorities could not get it started without the assistance of his men. He felt that the letter of his contract had already been carried out and that he would be fully justified in withdrawing his engineers at once without subjecting himself to suit for breach of contract. On the other hand, if he were to carry out the spirit of the contract, he would leave his men in Batum for at least a reasonable period of time, in order to help the Soviet authorities get the plant into full operation. He said that some time ago he had warned the Soviet authorities that on March 23 he would withdraw three of his engineers, and sixty days later the remaining three. He was under the impression that at the present time the withdrawal of any of his men would cause serious dislocation in the plant.
He wanted to know if in my opinion his employees would be in exceptional danger if they should remain several months longer in Batum. I replied that it was, of course, impossible to foresee the future; that in my opinion they would not be subjected to unusual danger; that our Embassy in Moscow was watching the situation closely, and that it would in all probability call the men out in case it should feel that the situation required such action.
Mr. Miller said that one of his difficulties lay in the fact that because of the inability of Soviet operating engineers the Soviet authorities [Page 188] would undoubtedly continue for an indefinite period to request extensions of the stay of his engineers.
I told him that in similar cases American manufacturers had set an absolute date upon which their men must be recalled and had given the Soviet Government reasonable notice in advance of their intention. It seemed to me that the Soviet Government could not accuse him of having failed to carry out the spirit of the contract if he should act in such a manner. He said that he believed that he would adopt this policy and would probably set the first of June or thereabouts as the deadline.
Mr. Miller said that he would draw the men out at once if I would authorize him to inform the Soviet Government that we had requested it. I told him that the Department of State was in no position to make such a request.
Mr. Miller stated that he had been under considerable pressure from some of his business friends in the Shell Oil Company to approach the State Department along with other lubricating oil people, with the request that the moral embargo against the Soviet Union be extended to cover the granting of technical assistance in the manufacture of lubricating oil and the sale of lubricating oil. He said that he had resisted such pressure thus far, but that it was rather strong, and he hoped that his company would not be labelled as disloyal or as disinclined to carry out the policy of this Government if it continued to keep its men in Batum. I told him that the loyalty of his company had never been subjected to doubt, and that if he desired to discuss the moral embargo I would arrange for him to see someone in the Division of Controls. He replied that he did not care to go further into the matter at this time.
Mr. Miller said that it was his understanding that the Russians had in this country a commission which was shopping around with the hope of making arrangements to spend several million dollars in obtaining American technical assistance to build gasoline and oil refineries. It was, therefore, possible that the question of whether American firms should accept contracts for the building of additional aviation lubricating oil plants might become active. I thanked Mr. Miller for this information.