611.60F31/135: Telegram

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

11. My No. 9, May 12, 9 a.m.12 As a result of conversations on 14th and 18th instant written reply to my aide-mémoire, copy12 of which was transmitted in my 437 of May 6, states as follows:

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Automobiles.

(a)
Local manufacturers have been instructed to cancel “alleged arrangement” and the manufacturers have reported that they have done so. New cartel arrangement has been substituted as reported in my despatch 433 of April 20,13 but which I am now informed provides for mutual monetary compensation, the details of which I am requesting.
(b)
Quarterly quotas of cars granted to other countries will be communicated to us upon request and our monthly quotas will henceforth be cumulative.
(c)
While not aware of exchange discriminations instructions have been given appropriate authorities to discontinue such practices if they exist.

Apples. Discussion continues regarding paragraphs A and B, 1 to 3; 6 and 8. Regarding 4 and 5, early alteration of present regulations under consideration “with a view to introducing uniform percentage rate calculated on the value regardless of any period taken into consideration” for both European and overseas fruit. Seven, quota American acquiescence will be granted without compensation based on representative period, provided lack of foreign exchange does not create extraordinary circumstances.

Raisins. Will grant quota without compensation equal to share of total imports in previous representative period.

Dyes. Judge that requests for exchange be answered as early as possible and attention of competent authorities has been directed to our complaint. Discussion of other phases continues.

Prunes. Will grant quota of 20 per cent of total imports and waive compensation unless circumstances arise as in 7 above.

Casings. Imports of American product are contingent upon imports of equal amounts from specified countries.

Lard. Should exigency possibilities change this Government is willing to negotiate for quota.

Cosmetics. Will grant quota without compensation as in 7 above.

Regarding intimidation, specific instances are requested informing me concerning which I shall withhold for the present as assurances are given that competent authorities have been directed to cease such practices should they exist. Terms of Czech-Austrian commercial treaty will shortly be communicated to you by Czech Legation in Washington from which this Government believes it will be seen that American interests have been considered.

This Government is apparently not prepared to grant us most-favored-nation treatment with regard to any of these commodities but, with the exception of automobiles, merely quotas based on our imports of these products over representative periods. I should, therefore, welcome your views as to the applicability of the unconditional [Page 37] most-favored-nation principle to cartel agreements and whether I shall insist that quotas for these products be equal to those granted the most-favored-nation.

Copies of foregoing documents forwarded by mail.

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