660F.116/145
The Minister in Czechoslovakia (Wright) to the Secretary of State
[Received January 23.]
Sir: With further reference to my telegram No. 75, of December 22, 11 a.m. and to the Department’s telegraphic instruction No. 50, of December 29, 2 p.m., and previous correspondence regarding the effect of certain provisions of the Czechoslovak-German Clearing Agreement upon shipments of American goods to Czechoslovakia under contracts between American and Czechoslovak principals, I have the honor to enclose a memorandum31 of a conversation which I had on January 4th, with the Assistant Chief of the Economic Section of the the Czechoslovak Foreign Office.32
As will be seen by the memorandum, the conversation—although it was my intention ultimately to direct it toward the specific matter in hand—first took the form of observations by Dr. Stangler of such general interest as to warrant my reporting them at this length. With particular reference to the effect of the Czechoslovak-German Agreement upon shipments of cotton to Czechoslovakia from the United States, it will be observed from pages 6 to 10 of the Memorandum that Dr. Stangler was evidently under the impression that the Agreement was not intended to apply to shipments of cotton arising from contracts directly between American and Czechoslovak principals, even if such shipments passed by way of Germany and, furthermore, that he was very much surprised to learn that the Czechoslovak National Bank had rendered an opinion to the contrary, as reported in the Consul General’s despatch No. 1460, of December 19, 1934.31
Meanwhile the agents in Bremen of American principals have evinced considerable concern with regard to the application of this Agreement to shipments via Germany, and the representative of Messrs Clason, Burger and Company, of Bremen, has informed the Commercial Attaché that only in the case of cotton consigned to Bremen, warehoused there, and later delivered under F. O. W. terms to Czech spinners, is there admittedly anything like an outlay in Germany of 4% in marks. He adds that, in his opinion, the attitude of the Czechoslovak National Bank transgresses an established and acknowledged international principle of transit business and may, although not in all cases, prove to the detriment of the American house. He also refers to the inevitable rise in the price of cotton to the Czechoslovak consumer in case this charge of 4% is insisted upon—a point which, it will be observed from the Memorandum, I mentioned [Page 166] to Dr. Stangler but upon which I did not dwell too long for the reasons set forth in the memorandum.
Two days after my conversation with Dr. Stangler, he informed me by telephone that as he was fully aware of the importance of the matter as well as of my desire to obtain a definite reply for transmission to my Government, he had made inquiry in writing of the National Bank in order that the situation might be clearly defined, and that he would not fail to advise me when a reply had been received.
I have learned indirectly through other sources that, as was to have been expected, the Czechoslovak spinning interests are opposed to the principle which appears to have been laid down in the present interpretation of the Agreement, and that they have so informed the competent authorities who are understood to have given some heed to their representations.
I had hoped to have been able, before this, to report a favorable outcome of my representations to the Foreign Office, but as the mail leaves today and as it appears desirable that the Department should be informed of the general considerations attendant thereon, I have deemed it wise to forward this report for the Department’s information in the meantime.
Respectfully yours,