550.S1 Washington/510
The Czechoslovak Legation to the Department of State
Czechoslovakia is in complete agreement in principle with the conclusions arrived at in the agenda submitted by the Preparatory Commission of Experts for the World Economic Conference in London. Without prejudice to the final decisions of the Conference, Czechoslovakia stresses the following points in the forthcoming decisions:
In regard to the financial question, the Czechoslovak Minister wishes to point out that in considering the abolition of foreign exchange restriction, it is necessary to differentiate strictly between such measures which concern the movement of capital and such which relate to the movement of goods. The Czechoslovak Minister assumes that even if the proposed World Economic Conference would achieve positive results, it will not be possible in the near future to abolish the above mentioned measures of the first category, for even in financially strong states, such as the United States and Great Britain, these kind of measures have lately been applied whether legally or in fact. The extent of eventual liberation will depend upon the mentioned eventual positive results of the Economic Conference. The entire abolition of these measures cannot be considered until after complete equalization of monetary markets is carried out and the causes of the crisis eliminated.
Also, as regards the exchange measures concerning the movement of goods, it is necessary to differentiate between those which really regulate the exportation and importation goods and those which relate to the question of payment of goods.
The regulations concerning the movement of goods are closely related with the tariff question, and moreover, with the questions of economic policy. In order to eliminate these measures, it will be necessary to consider them in connection with all questions of protection of production and in their relation to other states. The regulations concerning the question of payment of goods such as [Page 530] clearing could be abolished when there will be simultaneously other guarantees that the payment for exported goods would be effected.
Czechoslovakia is ready to abolish those kind of exchange restrictions which should be considered only as emergency measures and which from the point of view of Czechoslovakia’s economic policy are not advantageous. The Czechoslovak Minister wishes to point out the present unfavorable state of clearings with Central and Eastern European states. The question of importation restriction is very closely related to the general tariff policy. Czechoslovakia is now carefully preparing her new tariffs, with regard to the necessity of gradual abolition of more objectionable forms of international commercial restrictions. Upon this revision, Czechoslovakia would be prepared to carry out far-reaching removal of these restrictions. From Czechoslovakia’s agricultural point of view, it is important to insist upon such a solution which would avoid the use of the present secondary forms of commercial restrictions such as syndicates, permit regulations, quota system, veterinary restrictions, and other forms of indirect protections.
In the debt question,26 with the exception of governmental obligations, Czechoslovakia, although not directly interested, nevertheless respects with keen interest the affirmative solution of this question. In other words, Czechoslovakia is especially deeply interested in the general alleviation of the indebtedness of the Central and Eastern European agricultural countries which were formerly her best customers. As in Stresa,27 so in the forthcoming Economic Conference, Czechoslovakia is obliged to go hand in hand with the debtor states, especially so because with some of them she is closely bound together also politically in addition to the economic interest.
The Czechoslovak Minister wishes to stress that the success of the Economic Conference depends upon the realization of the thesis that the debtor nations under the present conditions cannot redeem their debt to their creditors except in the form of goods.
The preparatory commission of experts formulated its recommendations in the suggestion of a general return to the gold monetary standard even though it already took into consideration that the new parity of gold content might be lower than the parity provided for in the present legal provisions. With the abandonment of the gold standard in the United States, the conditions were, however, basically changed. The trend of equalization process of the [Page 531] price levels between the different countries suffered a considerable aberration, and the desired stabilization of the price of gold which through the decline of the English pound of Sterling was seriously affected was furthermore impaired. Through the abandonment of the gold standard in the United States, the world economic and monetary conditions were so radically changed that the interests of Czechoslovak exports are profoundly affected, whereby the stabilization of conditions which the commission presupposed did not take place. Thereby a new situation arose for Czechoslovakia’s economic life.
Czechoslovakia considers the most-favored-nation clause as the best guarantee of world economy, allowing of course, some latitude for eventual special regional needs of Central and Eastern Europe.
The conclusions of agreements between the manufacturers will find full support of Czechoslovakia. But as far as the limitation of wheat areas is concerned, Czechoslovakia considers it hardly possible as long as she will be unable to export again cereals of quality such as barley, malt, rye, hops, and special vegetable products which used to be the bulk of her exportation.
The prerequisite of a tariff truce seems to be in the opinion of the Czechoslovak Government a just and an equitable basis. The reduction of industrial tariffs will meet with the support of the Czechoslovak Government provided the reduction becomes general.
- For correspondence relating to the Czechoslovak debt to the United States, see p. 852.↩
- Conference for the Economic Restoration of Central and Eastern Europe, September 5–20, 1932; see Report by the Stresa Conference for the Economic Restoration of Central and Eastern Europe, submitted to the Commission of Enquiry for European Union [Geneva, 1932.].↩