File No. 861.00/3028

The Ambassador in France ( Sharp) to the Secretary of State


5531. Your 5960, October 19, 2 p.m. Upon the founding of the Czecho-Slovak National Council in February, 1916, the Constitution and Federal laws of the Council were adopted February 6, 1916. Article 5 of the Constitution reads as follows:

The financial resources to enable the National Council to work politically, diplomatically and militarily for the liberation of the Czecho-Slovak countries are obtained as follows:

Gifts of compatriots in Allied countries;
By national contributions voluntarily accepted by our compatriots;
By loans concluded in Allied countries or in the United States by the issuing of obligations in those countries with their consent.

Under this article Professor Masaryk contracted loans for the Czecho-Slovak military activity with Russia in May, 1917. Later he contracted a new loan for the same purpose with the British and French Governments. This money was devoted to recruiting Czecho-Slovak soldiers in Russia.

Under the same article he issued notes for a loan of 5,000,000 francs. The subscriptions to this were made by the Czecho-Slovaks in Russia. The revolution put a stop to the subscriptions.

The powers of Professor Masaryk, President of the Council, were established by a decree of February 10, 1916, indicating the powers of the various members of the Council. This was a complement to the Constitution and fundamental laws of the National Council. In this decree it is said:

The President of the Council is charged with representing the Council, appointing its delegates and acting in all questions of general policy in the name of the Council. Furthermore, all financial questions concerning the Czecho-Slovak movement are under his jurisdiction. In this capacity he is charged—

With securing for the Council financial resources for its political, military activity in conformity with the fundamental law and constitution of the Council and particularly article 5 of the Constitution;
To oversee the expenses, decide as to the disposal of funds and to assign them to other departments of the council;
To contract loans, sign in the name of the Council all financial agreements and obligations, to receive all funds and advances and dispose of them according to the decisions already adopted.

[Page 855]

When the Czecho-Slovak Government was established on September 26, 1918, Professor Masaryk was made President and continuing his previous functions was confirmed as Minister with his previous authority in matters of finance. On September 14, 1917, Professor Masaryk in virtue of the fundamental laws of the Council floated a loan in Russia. Following is the text of the bond:

Bond of the national Czecho-Slovak loan at 5 per cent for __________ francs. The National Council representing the Czechoslovak National Council in Bohemia and abroad will pay according to the contract stated the sum of __________ francs to Mr. __________ which have been loaned by him to the National Council for the War of Independence. In the name of the National Council, T. G. Masaryk, President.

The decision of the Provisional Government of September 26, 1918, confirming Professor Masaryk in his previous functions is in the customary terms:

Mr. Masaryk, President of the Government and of the Council of Ministers assumes the portfolio of finances and retains the functions in regard to financial affairs in the same measure as previously.

Upon the foregoing textual statements all previous loans have been floated. This information was given to Mr. Gibson by Mr. Beneš, head of the Council in the absence of Masaryk, with statement that it contains all the matter in the Constitution, by-laws and other documents pertaining to the subject of authority to contract foreign loans. Complete copy of these instruments, the Constitution being very long, are being forwarded by pouch.