The Minister in Czechoslovakia (Einstein) to the Secretary of State

No. 1549

Sir: With further reference to the Legation’s despatches regarding the difficulties attending the importation of our motor cars, and the increased allowance over the contingent of 500 cars of which I had informed the Department in my Despatch No. 1501 of March 6th, ultimo [sic], I have the honor to state that an arrangement had been made by the late Minister of Commerce Dr. Peroutka by which this additional importation was to be divided monthly with proper regard to the seasonal requirements. An allowance of 124 cars had been established for the month of May but before this could be ratified by the Minister, he had resigned from the Cabinet and his place was filled by Mr. Novak (see Legation’s Despatch No. 1541 of April 30, 192844) who began by holding the import licenses in suspense.

As over two hundred of our cars were waiting at the customs at Prague for the official permission the matter became urgent. I therefore called on the new Minister along with the Commercial Attaché, Mr. Baldwin, and asked for the issuance of these licenses. Minister Novak not only granted my request for the May allotment but anticipated the licenses for June, so that the 200 will at once be freed. He also told me he would consent to forestalling to an earlier date [Page 708] the licenses which mature later. I asked for more licenses but he expressed regret that he could not grant these at the present time, owing to the negotiations which are still to take place in Paris over the new Commercial Treaty with France in connection with the importation of French cars. Any advantage granted us, he said, would at once be claimed by the French. He held out hope, however, that later on he would consent to additional licenses which might again be granted against next year’s contingent. His manner was very conciliatory. I have for years kept up very friendly personal relations with the new Minister and I believe he will go as far as he dares to satisfy reasonable requests so long as he can do so without bringing undue trouble on himself.

From my French colleague, I understand that the French have met with the greatest difficulties in connection with their motor cars. They were unable to obtain any reduction in the present tariff and they hardly expect more than an increase in their contingent allowance from 800 to 1000 cars. The French Minister spoke to me with no little bitterness of the difficulty of their negotiations and the subordination of the Ministry of Commerce to the selfish demands of the manufacturers.

The fact that we have been able to secure relatively more favorable terms with respect to our motor car contingent over and above any strict treaty right and better than those enjoyed by France has made me unwilling so far to press for the abolition of certain unfair restrictions. There is, for instance, the incidence of the road tax which is aimed at our cars and penalizes them because of their higher cylindrical content, also certain lower valuations are granted to Austrian makes on a reciprocal basis and regulations prohibit the use of foreign cars as taxicabs. Yet I fear lest any pressure for the removal of these hindrances at this time when the authorities seem well disposed would be a tactical mistake and only result in a far stricter application of the contingent. Under existing circumstances we should in fact have more to lose than to gain by such insistence. The dealers are able to sell our cars even at prices three times as high as in the United States and their main problem today is one of import licenses. If later the contingent system were to be abolished or if new difficulties were to be placed in the way of the importation of our cars, I would then propose to protest against the practices aimed to restrict the use of American cars in Czechoslovakia.

I have [etc.]

Lewis Einstein
  1. Not printed.