501.BD Europe/6–1849: Airgram
The Chargé in the Soviet Union (Kohler) to the Secretary of State
A–635. Reference Geneva’s telegram 507, May 31 to Department1 requesting Embassy’s comment paragraphs 3 and 4. We are inclined to believe that the principal immediate factor explaining the completely negative Soviet attitude at second session ECE trade committee was, despite its apparent oversimplicity, unwillingness of the Kremlin to commit itself in advance of the impending session of the CFM.2 This does not mean in our mind, however, that Arutiunian was unable to act because he lacked specific instructions. We would think on the contrary that he was specifically instructed to sabotage and confuse the work of the committee and prevent it taking any positive decisions.
However, more fundamentally we believe that Soviet Government has never entered any multilateral arrangement with capitalist powers [Page 128] in good faith. As a matter of basic principle it abhors multilateral arrangements as it abhors non-Communist political blocs and participates in them only if it is able to control them either positively or negatively, i.e., able to direct them toward positive service of Soviet interests as in the case of WFTU; or negatively able to prevent them taking any positive action with which the Soviet Government does not agree as in the case of UNSC. Particularly as regards trade we see no chance that the Soviet Government will ever agree to any trade planning which will require a break in its hermetically sealed secretiveness or which threatens the structure of the Eastern European trade monopoly it is carefully constructing; the tendency is entirely in the opposite direction. This does not mean that the Soviet Government will not seek to use such meetings for propaganda or to profit to the maximum extent possible by disclosures made at such meetings with regard to the situation, needs and plans of third countries; however, it will seek to profit concretely from any such revelations bilaterally and not multilaterally.
In our view it should, however, also be noted that the negative attitude of Arutiunian at Geneva has not been significantly different from that of Vyshinski3 at Paris, and it seems apparent that Soviet policy in Europe in general is in a marking time stage. This we believe may well be due primarily to the fact that the Politburo is overencouraged by the indications of a deteriorating economic situation in the United States. During the past two months Soviet propaganda organs have given very marked attention to every drop in employment, in prices and in stock market quotations. At the same time the Kremlin has certainly noted the growing economy-mindedness of the United States Congress.
There is no alteration intended here of earlier Embassy estimates re the increasing urgency for the U.S.S.R. to alleviate its internal, Soviet Zone and satellite economic bottlenecks. The Kremlin undoubtedly continues to be very unhappy concerning the state of East-West trade, seriously hampered by our trade restrictions and embarrassed in filling commitments to its satellites. However, it seems quite possible that events over the past month have proved sufficiently compelling in Marxist eyes to take the calculated risk that the break in the west bloc’s trade controls will come from within. Hence, the tremendous importance of prospective weakened western unity and bargaining position has come to overbalance any cost involved in bearing such additional political and economic difficulties as may be occasioned by extension of the waiting period. We thus believe that there is not likely to be any alteration in the Soviet approach on basic issues until the foundations of such a calculated risk once more disappear, [Page 129] i.e., until the leveling off of the current U.S. disinflation process is assured and previous upward trend of reconstruction and stabilization of Western economies is definitely resumed.