611.6131/589: Telegram
The Chargé in the Soviet Union (Thurston) to the Secretary of State
[Received July 31—5:25 a.m.]
936. Department’s 392, July 27, 6 p.m.55 I was received this afternoon by Stepanov who took me to the office of Mikoyan,56 the Commissar [Page 447] for Foreign Trade. Although I had explained when requesting the interview that it was for the purpose of ascertaining whether the Soviet authorities were as yet prepared to present proposals with respect to the renewal of the commercial agreement Mikoyan waited for initiative in the conversation.
When I had restated my [purpose?] and Mikoyan replied that after my talks with Stepanov he had proceeded to draft a statement of the views of his Government with respect to the agreement but that just as he was doing so the United States Government had seized the gold which the Soviet Government had acquired in the United States from the three Baltic States.57 This action of the United States Government he said had been construed by the Soviet Government as a clear indication that the United States Government was not interested in maintaining good relations with the Soviet Government or in facilitating trade between the two countries. He had accordingly decided not to present the Soviet proposals.
In this connection he stated that the Soviet Government is a great power; that it is not confronted by the necessity of trading with the United States; and that if the United States continued its present practices that trade could very easily be diverted to other countries or the requirements of the Soviet Union be met by its own industries.
He continued by referring to our seizure of machinery and other articles purchased in the United States by the Soviet Government, to the Executive Order forbidding the exportation of certain commodities and articles except under license,58 which he said was in itself acceptable insofar as exports subsequent to its promulgation were concerned but was not acceptable if applied retroactively.
At this point, following a procedure which I had determined to adopt in all future interviews with Soviet officials after my experience with Molotov some weeks ago, I stated to Mikoyan that I must observe that the United States also is a great and powerful nation which could easily dispense with the volume of trade resulting from its commercial relations with the Soviet Union. I felt, however, that two great States such as we represented should find it possible to come to a prompt agreement which would surely be of mutual advantage despite incidental difficulties and that I would be glad to contribute toward such an outcome if he were so disposed. Mr. Mikoyan thereupon relaxed and became amiable, and stated that he had not finished his remarks. He had, he continued, caused Oumansky [Page 448] to take up with the State Department the question of the difficulties to which he had just referred and Oumansky had now reported that he had had an interview with Mr. Sumner Welles in which the latter had stated that the Government of the United States desires to improve relations with the Soviet Union.59 He had, in consequence, decided to present to me the draft of the Soviet proposals with respect to the commercial agreement.
He wished however, he said, to comment still further on obstacles to American-Soviet trade such as, for example, the failure of the American authorities for the past 20 days to grant export licenses to Amtorg.60 Over 200 applications by Amtorg for export licenses, on articles which in the opinion of the Soviet Union are not affected by our current laws and regulations, have been filed and disregarded. He stated that while the Soviet draft agreement would, as in previous years, signify the intention of the Soviet Government to purchase at least 40,000,000 dollars worth of American goods during the 12 months to be covered by the agreement, this undertaking could not, of course, be observed by the Soviet Government if the United States Government persists in hampering Soviet purchases.
When Mikoyan had concluded I stated that the subject of the Baltic gold in the United States had been taken up with me by Lozovski61 recently and that I had referred his protest62 to the Department. Pending the receipt of any instructions from the Department in answer thereto I was unable to discuss the matter.63 With respect to the necessity which my Government had encountered of acquiring certain machinery or other articles purchased in the United States by foreign governments including that of the Soviet Union I referred Mikoyan to the report undoubtedly made by Umansky following the receipt of the Department’s note to him dated July 1, 1940,64 excerpts from which as quoted in the Department’s 360, July 10, 6 p.m., I read to him. With respect to the delay in granting export licenses to Amtorg I stated that I would make special mention of this point in my report of our conversation to the Department.
At the conclusion of our interview, Mikoyan handed to me the documents comprising the Soviet draft proposal. He stated that [Page 449] the Russian text would be the official one, with the English text merely for convenience. Although I am aware that this constitutes a reversal of the practice followed last year, I did not consider it to be advisable at the time to attempt to reestablish the principle that the English text must govern, with the Russian text occupying the subsidiary position. This point, if the Department so desires, probably can be gained during later conversations.
The draft proposal consists of four documents which are being transmitted in a separate telegram following this.65 It incorporates provisions designed from the Soviet point of view to overcome the difficulties which the Soviet Government has encountered in conducting its trade with the United States, most of which, with the exception of that regarding the chartering of American vessels and the “moral embargo”, have been discussed with me either by Lozovski or Mikoyan. It omits, probably by oversight, reference to Soviet coal imports into the United States.
- Not printed.↩
- Anastas Ivanovich Mikoyan.↩
- The President signed Executive Order No. 8484 on July 15, 1940, regarding property of Estonia, Latvia, and Lithuania in the United States. For text, see 5 Federal Register 2586. For text of regulations by the Treasury Department issued on July 15, 1940, see 5 Federal Register 2593.↩
- For text of the President’s proclamation of July 2, setting up the controls considered necessary under the Export Control Act of July 2, 1940, see Department of State Bulletin, July 6, 1940, p. 12.↩
- See memorandum by the Acting Secretary of State, July 27, p. 327.↩
- Amtorg Trading Corporation, official purchasing and sales agency of the Soviet Union in the United States.↩
- Solomon Abramovich Lozovsky, Assistant People’s Commissar for Foreign Affairs of the Soviet Union.↩
- See telegram No. 885, July 20, 9 p.m., from the Chargé in the Soviet Union, vol. i, p. 395.↩
- For the Department’s reply, see telegram No. 423, August 9, 6 p.m., vol. i, p. 410.↩
- Ante, p. 323.↩
- Infra. ↩