660F.116/63
The Czechoslovak Minister (Veverka) to the Secretary of State
Excellency: I have been instructed by my government to present to Your Excellency the following information concerning the importation of American films into Czechoslovakia with regard to special importation permit regulations.
Films, in the opinion of my government, cannot be regarded as ordinary merchandise because of their cultural value, and therefore, all governments give them special consideration. Czechoslovakia was the last of all the film-producing countries of Europe to impose special regulations on the importation of films. This, however, became necessary with the development of sound and talking pictures because political questions were involved. In the interests of development of the national production of sound and talking films, there is a clause in the importation permit regulations which states that any producer in the Czechoslovak studios of one feature film in the Czech language has the right to preferential treatment as regards the importation of foreign films, that is, any such producer is allowed to import five foreign sound films. The producer who does not take advantage of this favor, could, with the approval of the Ministry of Commerce, transfer it to another importer.
The price for preferential treatment is established at 20,000 Cz. Cr. for one feature. In practice, the Czechoslovak Ministry of Commerce complies with the requests of the importers of American films and therefore all demands for preferential treatment for the importation of American films are granted.
The American film industry represented by its most important organization, was from the beginning against these regulations on the grounds that the American exporters were not able to support this charge. In this connection, I should like to mention that the Czechoslovak importation practice is one of the most lenient of all European film-producing countries. Further, all other film-importing countries such as France, Great Britain, Italy, are obliged to pay this charge, and finally the home distributing companies so far as they can import American films are also obliged to pay for the monopoly rights while the American branches do not pay for these rights to the central office. So far as I am informed, the American branch offices have at their disposal many films which earn for them on the Czechoslovak market approximately 800,000 Cz. Cr. and therefore, the charge of 20,000 Cz. Cr. amounts to only 2½% of the mentioned income. American films have always been held in a very high esteem in Czechoslovakia and the Czechoslovak authorities as well as the Czechoslovak public, heartily wish the most [Page 141] friendly relations with the American film industry. These relations were somewhat marred through the middlemen between the American film industry and the Czechoslovak public. I should like to point out, for instance, that the director of the branch office of Metro-Goldwyn in Prague is a foreigner who does not know Czech and also the majority of the directors of other branches in Prague are of German origin. These agents never show proper understanding for the national needs of the Czechoslovak Republic. It was only on the recommendation of the Prague and Berlin agents of American film companies that the Czechoslovak market was boycotted by the Hays3 organization. The Czechoslovak Government wishes that the interested countries might work together in the film branch offices and find some decision which would serve the needs of both if the interests of the Czechoslovak film industry and of the American film importers would be economically bound together.
The largest Czechoslovak film branches, such as the A–B Co., Ltd., in Prague, Elekta Film Co., together with the Slavia Film and Moldavia Film, Lloyd Film, and other firms, show readiness to buy American films and to take care of obtaining preferential treatment for importation of foreign films. This organization of the trade relations would be of value to both countries. I believe that under these conditions, it would be possible to assure to the American film industry its position on the Czechoslovak market which it formerly held.
From the commercial point of view, the American firms could get payments for the license rights immediately by importation of the goods instead of after the showing of the film which is the present arrangement. The protection of the market origin of American films would be assured by agreement.
I would greatly appreciate it if Your Excellency would kindly take this matter into consideration with a view to the favorable conclusion of the negotiations already begun between the respective interested Czechoslovak and American industries.
Accept [etc.]
- Will H. Hays, President, Motion Picture Producers and Distributors of America.↩