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32. Telegram From the Embassy in the Soviet Union to the Department of State/1/

Moscow, February 18, 1961, 7 p.m.

/1/Source: Department of State, Central Files, 032 Hammer, Armand. Confidential; Priority; Limit Distribution.

1967. Department pass Secretary Commerce. Embtel 1958./2/ Following are highlights of Hammer's conversations with Soviet officials:/3/

/2/Telegram 1958, February 17, reported that Armand Hammer, President of the Occidental Petroleum Corporation, had arrived in Moscow as a private citizen, but at the request of the U.S. Secretary of Commerce was looking into the possibilities of expanding U.S.-Soviet trade. (Ibid.)

/3/Memoranda of Hammer's conversation with V.M. Vinogradov, in the Ministry of Foreign Trade on February 14, and with Mikoyan on February 15, were transmitted as enclosures to despatch 558 from Moscow, February 17 (ibid.); a memorandum of Hammer's conversation with Khrushchev on February 17 was transmitted as an enclosure to despatch 563 from Moscow, February 21 (ibid.). A copy of his report on the trip to the Soviet Union is attached to a letter from Secretary of Commerce Hodges to Secretary of State Rusk, March 3. (Ibid.) For Hammer's own account of the background to the trip and his conversations with Soviet officials, see Hammer, pp. 312-328.

(1) Re US prohibition crab meat imports: Both Mikoyan and Khrushchev stressed US inspection to resolve "slave labor" issue out of question but would permit Hammer or other "tourists" to visit and see for themselves no slave labor employed. Clear implication this intended as way out of impasse and that Soviets would expect "tourists" to report their findings to US Government.

(2) Mikoyan intimated he might welcome meeting with Secretary of Commerce as a step toward improved economic relations. However, both he and Khrushchev appeared reluctant to take the initiative.

(3) Khrushchev stated he had already given order to settle lend-lease debt (prior to January 1960 discussions). "Just treat us as you did the British and we will be satisfied." He clearly stated this meant assurances that credits would be forthcoming following agreement on lend-lease debt. Mikoyan had stated that negotiations regarding credits and a trade agreement should parallel discussions for lend-lease settlement. Mikoyan also said USSR prepared to place orders for one billion dollars if credits can be arranged. Both Mikoyan and Khrushchev revealed their expectation that present US recession would be factor prompting us to seek expanded trade with USSR. They realize, however, that lend lease settlement and matters requiring legislation (credits, MFN) will take time. Mikoyan said that in any event substantial trade could be carried on with us on cash basis.

(4) Mikoyan and Ministry of Foreign Trade officials took same line saying three things need to be done to improve trade relations:

(A) Soviet buyers must have assurance that contracts will be honored without interference (e.g. license revocation) by US Government.

(B) USSR must be able to sell products with minimum of restrictions (need for MFN). Agreed Soviet products must be geared more effectively to US market.

(C) Better psychological atmosphere required among US businessmen. Must want to seek Soviet trade. General attitude of US Government important this respect. Export license determinations on borderline decisions also major factor.

(5) Throughout all discussions Hammer had clear impression Soviets eager to expand trade with US. Hammer stressed in discussions that improvement in economic relations would take time. Soviet officials in all three conversations recognize this and appeared to accept as fact to which they must accommodate.

(6) Hammer suggested to Mikoyan and Khrushchev that USSR send representative selection from its art treasures to US for exhibit--particularly selections from Hermitage. Also suggested that Eleanor Roosevelt could be appointed chairman of committee to arrange undertaking and that he believed exhibition could open at National Gallery in Washington followed by exhibits other large cities. Khrushchev said this an excellent idea and asked Hammer to prepare plan for carrying it out. He said he would give orders to Zhukov to work out arrangements with Embassy Counselor for Cultural Affairs after Hammer had submitted plans. Hammer intends to prepare plan after consultation in US.

(7) Hammer stated to Soviets that he preferred no publicity and none has been observed. While general activities known to some members Embassy staff, no evidence that foreign correspondents here yet aware his visit.

(8) Hammer had intended round world trip. In light these conversations plans to return to Washington early next week for report to Secretary of Commerce and Senator Gore. Would also like to talk with Ambassador Thompson. One copy each of memos of conversation personally being carried to Washington by Hammer at his insistence. No classification marked on these copies.

(9) Embassy Economic Counselor accompanied Hammer on introductory visit to Ministry of Foreign Trade. No Embassy officer present at meetings with Mikoyan and Khrushchev.



33. Editorial Note

French Ambassador Alphand met with Secretary of State Rusk on February 20, 1961, to discuss the situation in the Congo. According to a memorandum of the conversation, "Alphand said he thought we should be very tough with the Soviets and tell them frankly we would not accept a Communist regime in the Congo. He added Khrushchev anyway is not in a good logistic position vis-à-vis the Congo. The Secretary agreed and said that sometimes he thought we were over pessimistic about our own position in the Congo since the Soviets were having troubles too." For text of the memorandum of conversation, see Foreign Relations, 1961-1963, volume XX, pages 70-73.


34. Editorial Note

On February 20, 1961, Secretary of State Rusk called in Soviet Ambassador Menshikov to inform him that the United States supported the statement issued the previous day by the King of Laos insisting on his nation's neutrality. However, the United States did not support the King's call for an international conference to work out a settlement in Laos. Menshikov replied that the Soviet Union supported Laotian neutrality, as it had since the 1954 Geneva Conference. For text of the memorandum of conversation, see Foreign Relations, 1961-1963, volume XXIV, pages 56-58.

On February 21 the United States Intelligence Board approved Special National Intelligence Estimate 58-61: "Probable Communist Reactions to Certain U.S. Courses of Action with Respect to Laos." According to a brief of the SNIE, it expressed the Board's judgment that "except possibly in the case of more extreme U.S. military measures, we believe that Soviet leaders would not match U.S.-sponsored military actions in Laos with corresponding, step-by-step, Bloc military measures. Except in the case of the most modest U.S. military measures Bloc leaders would almost certainly expect that most of world opinion would be sharply critical of the U.S., and that this fact would deter the U.S. from pressing too far." For text, see ibid., pages 59-61.

On February 28 Menshikov informed Rusk that the Soviet Government believed that the 1954 Geneva Accords were not adequate to resolve the present situation in Laos and therefore supported the call by Prince Sihanouk for an international conference to strengthen the International Control Commission created in the 1954 agreement. For text of the memorandum of Menshikov's conversation with Rusk, see ibid., pages 63-66.

In telegram 2138 to the Department of State from Moscow, March 10, Ambassador Thompson reported on a meeting with Chairman Khrushchev on Laos, during which Khrushchev said the USSR shared "the same desire as you, namely to end fighting which only sheds blood, gives neither you nor us anything, and hurts relations between us." Khrushchev welcomed "a Laos that pursues neutral policy on model of Austria" and suggested that Rusk and Gromyko meet to discuss the matter. For text of the telegram, see ibid., pages 80-82.

In telegram 2139 to the Department of State from Moscow, March 10, Thompson reported that Khrushchev seemed convinced that the United States was "genuinely seeking" neutrality for Laos and was "intrigued by the possibility" of settling the problem. (Ibid., page 82, footnote 3) Nevertheless, a Rusk-Gromyko meeting in New York on March 18 produced little. Rusk found Soviet Foreign Minister Gromyko "completely elusive," according to a memorandum of the conversation. Gromyko refused to give substantive answers beyond a repeated insistence that discussions on Laos must begin with an international conference. (Ibid., page 93, source note)


35. Editorial Note

In a letter to Chairman Khrushchev, February 22, 1961, President Kennedy expressed the hope that "it will be possible, before too long, for us to meet personally for an informal exchange of views" and indicated that he had asked Ambassador Thompson to pursue the question of a meeting. For text, see Foreign Relations, 1961-1963, volume VI, pages 5-7. Khrushchev's reaction to Kennedy's proposal is described in Documents 41 and 42. In a May 12 letter to Kennedy, Khrushchev accepted the U.S. proposal for a meeting in Vienna on June 3-4 and reviewed some of the international problems requiring solutions. For text, see Foreign Relations, 1961-1963, volume VI, pages 18-21.

FOREIGN RELATIONS OF THE UNITED STATES - 1961-1963 - Volume V - Soviet Union P16

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