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

No. 1606

Sir: In my Despatch No. 1434 of December 12th45 ultimo [sic], I had the honor to convey to the Department the difficulties which I anticipated in connection with the future importation of our motor cars as soon as the immediate contingent had been exhausted. Owing to the increased demands for our cars the crisis has now arisen in a more acute form than ever before. The 200 additional import licenses hitherto granted against next year’s contingent are quite insufficient for our needs.

At the personal request of the Minister of Commerce, made to me at the time of granting the 200 licenses, I had refrained from pressing for an increased contingent pending his negotiations with the French. The latter had asked for an increase as well as for a reduction of the import duties, but were able to obtain only trifling concessions and these with the greatest difficulty. My French colleague, Mr. Charles-Roux, told me that his Government would have been unwilling to sign the commercial convention46 if it had not been that the failure to do so would have obliged them to exact higher customs duties on Czechoslovak products than on German.

After these negotiations were over it seemed unwise for me to press for a higher contingent at Prague while our delegates at Geneva47 were demanding the entire removal of this system. I had to wait for a few days until the Economic Conference had ended. Since then I have taken up the matter repeatedly and in different ways in close cooperation with the Commercial Attaché, Mr. Baldwin whose untiring efforts in behalf of our cars deserve the warmest commendation.

A delegation of the native representatives at Prague of American firms lately called to ask for the Legation’s assistance in helping them to obtain import licenses for some 500 American cars and trucks now at the Prague customs and some 400 more ordered, paid for and due to arrive before August 1st. I have suggested to them a course of action both with respect to the publicity of their case and the nature of the assistance which they should ask from the firms in the United States which they have expressed themselves as desirous to adopt.

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I have also called on the Minister of Commerce in their behalf. The latter proposed to grant 300 additional licenses against next year’s contingent but said that for the time, he could now do no more.

My next visit was therefore on Dr. Benes with whom I left Note No. 1145 (see enclosure)48 which contains a complete statement of our case. Dr. Beneš although personally sympathetic to a more liberal treatment declared that he was in a minority of one to the Cabinet and that he would be obliged to consult his colleagues who held the so-called economic portfolios. The present situation depended on domestic politics and in the latter the manufacturers and the farmers had reached a working agreement based on reciprocal high protection.

I told Dr. Beneš that I had hitherto prevented the local dealers from beginning a press campaign on the iniquity of the present situation in which they intended to ask why the Government should forego 20 million crowns revenue in duties and taxes for the sake of a few manufacturers who were working overtime and did not need this protection. Dr. Benes told me that he himself would welcome seeing such an attack. For tactical reasons, the Commercial Attaché who is in close touch with the dealers has advised these not to begin this, at least during the development of the negotiations.

I have asked the Minister for Foreign Affairs, pending the removal of the contingent system in 1930, to establish a quota for our cars which would be based on some definite relation between local production and imports. Dr. Beneš has promised to do his utmost to secure better terms for our cars, but he did not hide from me the difficulty of securing these from a cabinet so largely under the influence of the manufacturers.

My recent action is as far as the Legation can go and if it is not efficacious the Department will have to suggest stronger measures and instruct me as to its wishes.

I have [etc.]

Lewis Einstein
  1. Not printed.
  2. Treaty of July 2, 1928, between France and Czechoslovakia, League of Nations Treaty Series, vol. xcix, p. 105.
  3. For correspondence regarding Second International Conference for the Abolition of Import and Export Prohibitions and Restrictions, Geneva, July 3–19, 1928, see vol. i, p. 366.
  4. Not printed.