Foreign Relations of the United States, 1961–1963, Volume V, Soviet Union

210. Telegram From the Embassy in the Soviet Union to the Department of State⁰

Moscow, July 8, 1962, 7 p.m.

56. President First Nat City Bank Moore reports Mikoyan told him July 5 A) USSR anxious increase trade with US. B) Berlin constitutes major obstacle to expanded US-USSR business relations. C) Berlin settlement would be reached. D) USSR short of foreign exchange. E) USSR eager sell raw materials to US at or under world prices. F) Long or short term credits desired.

At Embassy suggestion Moore asked to see “best plant behind Urals.” After Soviets unsuccessfully attempted substitute Donbas visit, Moore flew July 6 to Sverdlovsk, thence by small plane via Chelyabinsk to Magnitogorsk for five hour tour worldʼs largest iron-steel plant.

Moore noted A) “dispersal” of vast industrial complex from Sverdlovsk to Magnitogorsk. B) Huge open pit mines at Chelyabinsk and Magnitogorsk. C) General accuracy of Kish “Economic Atlas of USSR” which he used openly in plane to identify industrial plants, pipelines, power lines. D) Magnitogorsk plant currently produces 10 million tons steel and expansion to 15 mt underway. E) Plant operates under three 8-hour shifts, seven days weekly. F) No surplus labor apparent, workers paid average 200 rubles monthly or about double Moscow factories. G) Magnitogorsk iron ore reserves half depleted, concentration has dropped from 65 percent to 35 percent, but other nearby deposits more than adequate. H) Much new construction underway (uncompleted) in Ural area. I) Plant producing inter alia steel plate for gas lines. J) Hosts claimed USSR produces 40-inch pipe. K) Heavy security precautions, plane followed same circuitous course to and from Sverdlovsk. At request Magnitogorsk director, Moore pointed out shortcomings in plant, principally “maintenance.” “No American company is rich enough to treat equipment like you do”. Hosts agreed state should permit plant retain more profits for maintenance and depreciation.

During week visit USSR Moore met many prominent Soviets including Khrushchev (at July 4 Spasso reception).¹ Common Market frequently raised by Soviets. Moore stressed Common Market presented more problems for US than USSR view level trade, told Soviets that US banking circles estimated that one percent increase in Common Market growth rate sufficient to offset injury US domestic industry, refuted Soviet arguments that underdeveloped countries would suffer damage, and assertedUK membership would constitute best protection against frequently expressed Soviet fears of German resurgence.

View Mooreʼs obvious ability, competence as industrial observer and contacts here and at home, Dept may wish consider appropriately high level invitation visit Washington to report his observations.² Moore preparing notes on flight Moscow-New York July 8.

McSweeney

0. Source: Department of State, Central Files, 411.6141/7-862. Confidential.
1. In a 7-line telegram on July 4 the Embassy in Moscow reported that Khrushchev, despite the absence of Ambassador Thompson and a heavy schedule connected with the visit of the Austrian Chancellor, had attended the July 4 reception at Spaso (the Ambassadorʼs residence) and stayed for an hour. (Ibid., 811.424/7-462)
2. On July 12 George S. Moore had lunch with Ball and a group of senior Department of State officers. He left with them a general memorandum on his trip to the Soviet Union, a 5-page report on his meeting with Mikoyan, and a report on the visit to Magnitogorsk. Copies of these documents were sent to Bundy on July 16 and included in the Presidentʼs weekend reading. (Memorandum from the Executive Secretary to Bundy; Kennedy Library, National Security Files, Countries Series, USSR)