861.24/8–3149

The Deputy Under Secretary of State (Rusk) to the Secretary of the Navy (Matthews)

secret
urgent

My Dear Mr. Secretary: Reference is made to the Department of State’s letter to you of August 18, 1949 and to Mr. Kimball’s reply of August 31, 1949 concerning the position of this Government in the negotiations with Soviet representatives on the return of three icebreakers and twenty-eight frigates of the United States Navy lend-leased to the Soviet Government during the war.

At a meeting with Soviet representatives on September 1 in which representatives of the Department of the Navy participated, the procedure agreed upon in Mr. Kimball’s letter of August 31 was followed. The Soviets were advised that in accordance with the provisions of Article V of the Soviet Master Lend-Lease Agreement and in accordance with the precedents established in the return of Naval craft by other Governments, the Soviet Government was clearly obligated to return Naval craft to ports in the United States. In particular it was pointed out that the designation in this Government’s note of January 11, 1949 of the ports of Norfolk and San Francisco had not been questioned by the Soviet Government up to the time of the present negotiations, in fact the Soviet Ambassador’s replies of June 26 and July 22 to our January note had failed to mention this as an issue, thus indicating Soviet acceptance of the ports designated by the United States. The Soviet representative held adamantly to his original position, which was restated to the effect that the port of Hakodate in Japan for the frigates and a port in the western zone of Germany for the icebreakers were considered by the Soviet Government as middle positions which should be acceptable to the United States. Further insistence on our part on the Soviet obligation to return the vessels to United States ports drew forth the query from the Soviet side as to whether or not the United States position meant that this Government did not desire the return of the vessels.

In view of the unwillingness of the Soviets to alter their position in any manner, especially the implied threat that the vessels would not be returned if the United States insisted upon return to United States ports, the procedure agreed to in Mr. Kimball’s letter of August 31 was then followed. The Soviets were told that despite the obligation of the Soviet Government to return all the vessels to the United States, the United States side solely in the interests of expediting an agreement was willing to accept the return of the icebreakers at a designated port in western Germany in return for which it expected the Soviet Government to deliver the frigates at San Francisco. The Soviets stated that they had no instructions in connection with [Page 734] this proposal but would report the matter to their government and would advise us of a decision at an early date.

Soviet representatives have today requested that a further meeting of the negotiators be held on Tuesday, September 6, 1949. In view of the Soviet request for another meeting within less than twenty-four hours after the Soviet representatives were requested to refer a compromise proposal to their government and having in mind the weakness of the United States bargaining position, it seems most probable that the Soviet position will remain unchanged. The Department of State remains of the opinion, for the reasons stated in Mr. Webb’s letter of August 18, that this Government should be prepared to accept delivery of the frigates in Japanese ports. Accordingly, and in order that no risk may be run of jeopardizing the return of the frigates to United States custody, the approval of the Department of the Navy to taking delivery of them in Japanese ports, in the event that the Soviet position remains unchanged, is urgently requested.

Sincerely yours,

Dean Rusk