(2) I started by reminding Halifax of the attempt to open trade negotiations during last September/October and of my conversation with Butler on 18 March. I then told him that the Soviet government is ready to open trade negotiations now if the British government genuinely wants this and is minded to seek a satisfactory solution to the problems concerning Soviet–British trade. Naturally, such negotiations can be conducted only in a conducive atmosphere. From this point of view, a most significant step would be for the British government to free the Selenga and Vladimir Mayakovsky prior to the opening of negotiations and to abstain in future from detaining cargos destined for the USSR. Such an action would produce a good impression in Moscow and would be seen as an indication of Great Britain’s readiness to improve trade relations between our countries.

(3) Having heard me out, Halifax replied that he would consult his colleagues in the Cabinet and the Board of Trade, after which he would have something more definite to say. With reference, however, to the question I had raised of the release of Soviet ships, he found it necessary to make some preliminary remarks. He fully understands the inconvenience caused to the USSR by the detention of its ships and cargoes but, on the other hand, the USSR must understand the position of the ‘Allies’, especially Britain. Britain is fighting for its life with Germany, and the blockade against the latter is one of the key weapons in the war. Therefore, it is vitally important for England to seal all possible channels through which Germany might obtain the means and materials she needs to prosecute the war. It is precisely this point of view which guides the British government in its monitoring of ships sailing to counties adjacent to Germany. The British government makes no exceptions here. The ships of all nations are subject to monitoring, including those of America and Italy, if they follow the routes indicated above. Nothing will change on this score.

(4) I retorted that if England insists on its belligerent rights, the USSR, being neutral, insists on its rights as a neutral state which, as is well known, stipulate the full possibility of free trade with both belligerents. True, the question of the rights of neutrals seems to be ‘out of fashion’ today (Halifax snickered at this point and interjected, ‘That’s not our fault’), but any neutral state has the right to defend its position (‘If it’s a great power,’ Halifax interjected again). This is what the USSR is planning to do, and the British government must take that on board. Halifax replied that the interests of belligerent and neutral countries clash on the issue under discussion, and it is obvious that this conflict can be settled only by way of a compromise. Were it possible to find some way of guaranteeing that certain products are imported by the USSR solely for its domestic needs, the British government would prove much more amenable in the matter of the free passage of our ships and cargoes. The British government has already set such precedents. England has concluded a number of ‘military trade agreements’ with other countries during the war, where a solution to this problem has been found. Similar negotiations are currently under way with other foreign states. I argued that the USSR could not be lumped together with countries with private and capitalist economic systems. In those countries, any individual businessman, guided solely by his private interests, will be ready to re-export any product to Germany for a good price. In this case, the blockading country may perhaps introduce special control measures to prevent ‘leakage’. In the USSR, the situation is quite different. We have a monopoly of foreign trade, and in these conditions only the word of the Soviet government can provide a guarantee in the sense meant by Halifax. Unfortunately, I could see that the British government finds such a guarantee unsatisfactory. I, for example, had stated quite officially that the cargoes carried by the Selenga and Vladimir Mayakovsky were destined for the USSR, yet a satisfactory solution to the problem did not follow.

(5) Halifax said that he did, of course, understand the difference between the way trade is organized in the USSR and the way it is done in other countries. The trouble is that relations between the Soviet government and the German government, and their economic relations in particular, are liable to cause the ‘Allies’ great suspicion concerning the eventual recipient of products imported by the USSR. In this connection Halifax once again raided his memory for all sorts of stories about close cooperation, a ‘bloc’ and virtually an ‘alliance’ between Germany and the USSR. I refuted these allegations, ridiculed some of them, and added that the position of the British government struck me as very strange: in the final analysis, the USSR does much less for Germany in the economic field than the USA does for the ‘Allies’. Halifax agreed with this but added: ‘I think the Germans would be only too glad to bring to a halt our imports from America, if they could.’ In the end Halifax repeated that he would report my question to the government and then give me an answer.

(6) Halifax asked me somewhat hesitantly whether I could tell him anything about the general line of Soviet policy today and in the near future. He was interested in Northern Europe and other parts of the world as well. I said I had no instructions from my government to this effect, but I could share my personal considerations with him if he wished me to. I then told him more or less what I told Butler on 22 February. Halifax listened attentively and asked whether the Soviet–Finnish agreement had been ratified. I said it had. Halifax then enquired whether the new Soviet–Finnish borders had been finalized. Not yet, I replied, but a mixed commission was being formed and would get to work soon. Halifax asked how long the commission’s work would take. I replied that I did not know for certain, but, providing there was no unexpected delay, I believed the matter could be settled in a relatively short period of time. Halifax then asked whether we anticipated any complications with the final demarcation of borders. I said that I couldn’t speak for the Finns, but that the Soviet Union is accustomed to carrying out the agreements it concludes. Halifax then asked with a shade of mistrust in his voice: ‘So you don’t have any designs on Sweden or Norway?’ I suppressed a laugh and replied: ‘You may rest assured that we are not aiming for Norway’s Atlantic coast.’ Next, Halifax wanted to know what lay behind the tumult in the German press about a tripartite bloc (Germany, Italy and the USSR) and its Balkan plans. I advised Halifax to be more sceptical about journalistic sensationalism and referred him to what I told Butler about the nature of Soviet–German relations on 22 February. In turn, I asked Halifax about the Allies’ intentions in that part of the globe. For on our side, to put it mildly, there seems to be a lack of clarity in this matter, which does little to improve Anglo-Soviet relations. Halifax avoided the question, and instead asked me about the current state of our relations with Rumania and Turkey. I replied that our relations with these countries were quite normal. Halifax further enquired whether we intended to resume the talks with Turkey which had been suspended in October. I pleaded ignorance.