Evening star., 1939-06-25
Third New Deal Is Launched
In i. S. Relations With Soviet
Steinhardt Going to Moscow With KNOWLEDGE
That Days of Great Expectations and
Recriminations Are Over
By Joseph II. Baird.

went to live In Moscow as the United
States Ambassador, charged with iron.
ing out the many vexing problems In
Soviet American relations. his admira.
ton for things Soviet changed gradu-
ally to surprise, then vexation and.
finally, resentment.
After some months of negotiations,
his efforts to reach, settlement of the
American claims against Russia broke
down completely. During the Roose-
velt-Litvinof conversations in Washing.
ton which preceded recognition, it had
been agreed in confidence that Moscow.
while not officially recognizing the
Czarist and Kerensky debts, would. If
an American credit were granted, repay
q considerably larger amount, and that
this excess of payment might be cred.
tied on the claims
Although it was never officially an
nounced, the negotiations really broke
down over the technical question of
whether Mr.. Roosevelt had promised
Lltvinon a credit or a loan" Mr..
Bullitt insisted that the agreement was
Tor credit to be spent here. The
Russian foreign minister vigorously as
serted that he had been promised a
loan. 1t became matter of one mans
word against anothers, and the conyer-
sations ended in spirit of anger
The American Embassy staff felt. to
put matters badly, that Litvinoff had
given the United States "the run.
around" and had raised the technical
issue OF loan" merely to escape a
settlement of the debt.
Angry Dispute Arises.
An angry dispute arose between Wash
ington and Moscow, too, as a result of
the meeting of the Comintern in 1895.
For several weeks, it provided a forum
from which American Communist
speakers gloated over the labor strikes
which, they said, they had started in
the United States and outlined plans
for stirring up further trouble here,
American officials protested that the
proceedings were direct violation of
the Roosevelt Litvinoff agreement,
which provided that the Soviet govern.
any organization seeking to disturb the
peace and safety of the United States.
Litvinoff rejected the protest, declaring,
rather naively, that of course the Sow.
let promise had no reference to the
Comintern.
Mr.. Bullltt, essentially a bourgeois
liberal, was shocked, too, by the terrorism
rampant in Russia during his ambas-
sadorship. Many of his personal friends
among the Russians were arrested and
exiled. He and other members of the
Embassy were under constant espionage.
Finally, Soviet-American relations be-
came so embittered that the State De-
partment withdrew half of the large
staff it had sent to Moscow, and Mr..
Bullitt was transferred to the less tense
atmosphere of Paris.
AS Mr.. Bullitts successor in the
workers Fatherland," Mr.. Roosevelt
selected man who was his direct op-
posite-Joseph E. Davies, frankly a big
capitalist, unsentitnental and with no
emotional predictions toward the
great experiment"
Oddly he and the Russians seem to
have gotten along very well. Davies
was extremely interested in Russia's
huge industrial plant. He toured fac
tories and collective farms, appraising
them with an expert and sometimes
complimentary eye. This pleased the
Soviet government, fond as a child with
new toy of its factories hydro-electric
stations and other appendages of ex-
banding industrialization.
But, officially, American-Russian re-
lations remained cool. The American
Embassy continued to operate with a
skeleton staff. Mr. Davies mission ac-
complished little except to preserve the
formal aspects of diplomatic relations.
No Hope for Claims.
Now the "Soviet-American honey
moon definitely is over and certain
clear facts are recognized both in WASH
ington and Moscow. The State Depart
ment here knows well-although it does
not say so officially-that the Soviet
government has not the slightest inten.
ton of settling the public and private
American claims against the Czarist
and Kerensky regimes. 1t knows, too,
that Moscow will continue to be the
home of the Comintern and the source
Of Communist-fostered labor disturb
ances in the United States, regardless
of what Litvinoff may have said to the
contrary And Moscow has learned by
now that the United States no longer
is playing the role of financial Santa
Claus.
But, with these negatives granted and
understood, officials say. there still is
every reason for the continuance Of
Soviet-American diplomatic relations
and an ample opportunity for Nj.
Steinhardt to accomplish fruitful mis-
sion.
There Is room for a normal rather
than sensational trade expansion. Rus
sia is badly in need of American con.
sumption goods, in which it is still def.
cient, while the United States is a ready
market for Soviet manganese and lum-
Der.
Indeed, within the last year trade be.
tween the two countries showed an en-.
couraging activity. United States ex-