AMERICAN ATTITUDE OF RESERVE TOWARD TRADE RELATIONS WITH SOVIET RUSSIA 661.1115/266 67 The President of the American Federation of Labor (Gompers) to the Secretary of State WASHINGTON, March 15, 1921. SIR: If it is not incompatible with the public interest would it be possible for me to secure information from your department relative to the situation in Soviet Russia? There is much propaganda being circulated in the United States claiming that the demand for manufactured goods in Russia is so great and the purchasing power of the Russian Soviet government so vast it is almost impossible to determine the actual capacity of the Russian market to absorb goods of foreign manufacture. This scarcity of goods is laid to the blockade, which as I understand it was removed July 8, 1920. It is said that the pressing needs of the Russians are large quantities of the following: Locomotives, cars, rails, tires, springs, etc. Tractors, plows, reapers, mowers, binders, harrows, and other tools, large and small, binder twine. Motor trucks. Leather goods: shoes, etc. Textiles. Chemicals, drugs, soap. Notions. Belting, all kinds. Oil well machinery and piping. Mining machinery. Rubber goods. Ties. Typewriters. Sewing machines. Surgical instruments. Machinery and machine tools of all sorts. Printing presses, and printing supplies. Small tools. Sheet iron. Tool steel. Camera and camera supplies, films, etc. Raw cotton. It is also claimed that the Commissariat of Foreign Trade of the Soviet government has given orders for the purchase of the following in America: Agricultural machinery, including tractors, mowers, binders, reapers, plows, cultivators, etc., specified orders to the extent of $50,000,000; machine tools, between $3,000,000 to $5,000,000; small tools, files, drills, etc., between $3,000,000 and $5,000,000; 30,000 to 100,000 tons of rails; 10,000 tons of locomotive ties; 2,500 tons of spring steel for locomotive and car springs; 10,000 tons of sheet iron; 50,000 tons of oil piping. These figures, it is claimed, do not represent all the orders that would be placed at once. It is alleged that the Federal Reserve Board has refused to permit the transfer of funds to the United States from the Soviet Russian government in order to pay for the goods, although payment in gold is guaranteed. It is claimed that the American manufacturers are For previous correspondence concerning trade relations with Soviet Russia, see Foreign Relations, 1920, vol. 1, pp. 701 ff. prevented from accepting the gold on the probability that it was illegally acquired by the Soviet government. It is also said that the following raw materials are ready for shipment to the United States if only the American government recognizes the Soviet government of Russia : Lumber, unlimited quantities; Flax, 20,000 tons; Hemp, 10,000 tons; Furs, 9,000,000 pelts; Bristles, sorted and cleaned, 1,000 tons; Horse hair, 2,000 tons; Manganese ore, 250,000 tons; Asbestos, 8,000 tons; Hides, 3,500,000 skins; Platinum, large quantities; Petroleum and petroleum products, 2,000,000 tons. Another claim made is that if the restrictions placed on trade with Russia were removed it would place in operation many mills, shops and factories now closed down and would give employment to the unemployed of America. This propaganda is being widely circulated among labor organizations and I have received many letters asking me what is the truth. In this connection I have repeatedly called attention to the action of the American Federation of Labor convention at Montreal, June 7-19, 1920, as follows: "Resolved, That the American Federation of Labor is not justified in taking any action which could be construed as an assistance to, or approval of, the Soviet government of Russia as long as that government is based upon authority which has not been vested in it by a popular representative national assemblage of the Russian people; or so long as it endeavors to create revolutions in the well-established, civilized nations of the world; or so long as it advocates and applies the militarization of labor and prevents the organizing and functioning of trade unions and the maintenance of a free press and free public assemblage." This resolution was based on a report made by the Executive Council of the American Federation of Labor and previously unanimously approved by the convention, as follows: "Bolshevism has been a lure for some of our people and its doctrines have been propagated with great vigor. This hideous doctrine has found converts among two classes of people principally-those intellectuals, so-called, who have no occupation save that of following one fad after another, and those so beaten in the game of life that they find no appeal in anything except the most desperate and illogical schemes. The rank and file of the organized labor movement, as was to have been expected, has given no countenance to the propaganda of Bolshevism, but has, on the contrary, been its most effective opponent in America." Whether the statements in the circular are true or untrue, the widest publicity of the facts should be given. It would be more effective if it could be in official form. If that can not be done the proper knowledge should be transmitted to the various organizations that have resolutions on the subject before them for approval or disapproval and only awaiting an answer from me as to the real situation. I therefore request, if it is not contrary to the rules of the Department of State or if not against the public interest, that you furnish me with such information as you might have on the matter. I would also like to know the amount of exports and imports between the United States and Russia for a number of years preceding the war, as it is claimed these would be enormous because they have been enormous in the past. This question is of vital interest to the people of the United States as they should not be misled by propaganda that is consciously or unconsciously directed to aid the Soviet government of Russia against the interests of our people. I therefore trust that I am not asking too much. Yours very truly, SAM'L GOMPERS 661.1115/264 The Secretary of Commerce (Hoover) to the Secretary of State WASHINGTON, March 16, 1921. DEAR MR. SECRETARY: In view of the British Government agreement for trade with Soviet Russia, I imagine the nationals of that government will now be allowed to take Bolshevik gold. In the meantime the objections given by our State Department have been such that this gold cannot be marketed in the United States, there being one actual shipment lying in this country at the present time, which came through Esthonia. While I understand it is the policy of the State Department not to enter into commercial agreements with the Bolshevik Russians, it is still the policy of the State Department to allow trade with Bolshevik Russia at the risk of the trader. This, however, cannot take place unless Americans can receive gold in payment as there are practically no other commodities in Russia for exchange. If the British trade agreement allows British subjects to take this gold it would seem to me very unfair to continue our attitude in the matter. We could immediately start up some export to Bolshevik Russia if our people were allowed to receive Bolshevik gold. Such trade would, no doubt, pass through Riga and Finland. I would be glad indeed if the State Department could take some action in this matter; otherwise, if it is true that this gold can be received by British merchants, it would all filter out through British agencies and no doubt some portion of it would get to the United States through British intermediaries, to the damage of our citizens. I hope you will have someone investigate this matter. Yours faithfully, HERBERT HOOVER 641.6131/19: Telegram The Chargé in Great Britain (Wright) to the Secretary of State [Paraphrase] LONDON, March 16, 1921-noon. 216. Trade agreement with Soviet Russia signed last night at Board of Trade. This information is from official source. I have informed Berlin, Copenhagen, Paris and Warsaw. WRIGHT 661.1115/279: Telegram The Soviet Representative in Esthonia (Litvinov) to the Congress of the United States and President Harding REVAL [undated]. [Received March 21, 1921.] 68 Have the honor transmit as instructed by my government following message, LITVINOFF Plenipotentiary Representative From the first days of her existence Soviet Russia had nourished the hope of the possibility of a speedy establishment of friendly relations with the great Republic of North America and had firmly expected that intimate and solid ties would be created between the two republics to the greater advantage of both. At the time when the entente powers had begun their invasion of Soviet Russia unprovoked and without declaration of war the Soviet government repeatedly addressed itself to the American government with the proposal to adopt measures for the cessation of bloodshed. Even when the American troops together with the others participated in 68 At the White House; copy transmitted to the Department Mar. 28. the attack upon Soviet Russia the government of the Russian republic still expressed the hope of a speedy change of America's policy towards her and demonstrated this by its particularly considerate treatment of the Americans in Russia. But President Wilson who without cause and without any declaration of war had attacked the Russian republic showed during his whole administration a growing hostility towards the Russian republic. Soviet Russia hopes that the American republic will not persist in obdurately following this path and that the new American government will clearly see the great advantage for the two republics of the reestablishment of business relations and will consider the interests of both peoples which imperatively demand that the wall existing between them should be removed. The Soviet republic entirely absorbed in the work of internal reconstruction and of building up its economic life has not the intention of intervening in the internal affairs of America and the All Russian Central Executive Committee makes herewith a categorical declaration to this effect. At the present time after Soviet Russia has concluded treaties and established regular relations with numerous states the absence of such relations with America seems to Soviet Russia particularly abnormal and harmful to both peoples. The All Russian Central Executive Committee addresses to you the formal proposal of opening trade relations between Russia and America and for that purpose the relations between the two republics have to be on the whole regularised. The All Russian Central Executive Committee, therefore, proposes to send a special delegation to America which will negotiate upon this matter with the American government in order to solve the question of business relations and of resumption of trade between Russia and America. President of the All Russian Executive Committee, M. Kalinin; Secretary P. Zalutsky." 861.51/1002 The Assistant Secretary of the Treasury (Gilbert) to the Assistant Secretary of State (Dearing) WASHINGTON, March 25, 1921. DEAR MR. DEARING: As requested by you at our conference yesterday, I am writing to indicate the position of the Treasury Department with respect to Russian gold. The Treasury acts in purchasing gold at United States Mints and Assay Offices under certain provisions of the Revised Statutes, particularly Sections 3519 and 3545. These statutes make it clear, first, that the transaction is not a mere minting operation but a pur |