The Acting Secretary of State to the Minister in Czechoslovakia ( Wright )
Sir: The Department encloses a note (date left open) which it desires you to transmit to the Czechoslovak Minister of Foreign Affairs. Two copies of the note for your files are also enclosed.
As you will observe, the position taken by the Department with reference to American trade with Czechoslovakia is that (1) the Czechoslovak Government must unilaterally take steps to insure to our commerce the equality of treatment provided by the modus vivendi of March 29, 1935, and the confidential note of the same date;21 and that (2) this government will not bargain in order to remove discriminations which exist in contravention of the terms of the agreement.
The Department takes this opportunity to congratulate you and your staff for the able execution of your instructions in discussing trade problems with the Czechoslovak officials. It is not satisfied, however, that the Czechoslovak Government’s assurances or proposals, as reported in your despatches, do in fact guarantee at all adequately most-favored-nation treatment to our trade. Accordingly, it will be necessary for you, at the time of presenting the enclosed note, to re-emphasize the Department’s opinion on this subject, and to reiterate that this Government, while asking no specific trade concession, must insist that its trade with Czechoslovakia receive, without exception, no less favorable treatment than the trade of any non-Danubian country, as provided for in the modus vivendi and the confidential note of March 29, 1935.
You should convey the impression that your Government views with deep concern the constant disabilities that are being put in the way of American trade in Czechoslovakia; that your Government’s concern [Page 49] relates not only to the discriminations involving individual items such as you have already called to the attention of the Czechoslovak Government, but also to the general discrimination which the Czechoslovak Government is practicing against American commerce by the inequitable allocation of foreign exchange; and that this latter consideration is of the greater importance in view of the Czechoslovak Prime Minister’s recent declarations respecting the new policy of diverting trade to those countries with which Czechoslovakia has clearing agreements. You may make it clear that unless the Czechoslovak Government finds it possible to correct these disabilities within the very near future, the Government of the United States does not propose to continue extending trade benefits to Czechoslovakia, and that early consideration will be given to the abrogation of the existing commercial arrangement.
With respect to the individual items of trade discussed by you with the Czechoslovak authorities, the Department encloses résumés22 of the views of the interested Departments of this Government on the results of your representations. Each product is treated separately. These ten memoranda are for your information and guidance, and are not for communication to the Czechoslovak Government. They indicate approximately what the Department would consider as acceptable treatment. In the event the Czechoslovak authorities approach you with a concrete suggestion concerning the proposed treatment to be accorded a specific commodity, you are authorized to state, if the proposal falls short of the treatment indicated in the memoranda, that in your opinion, it would not be acceptable. On the other hand, if the proposal seems to be acceptable, you should not commit this Government in any way by agreeing to it; rather, you should suggest that the proposed treatment be put into practice and that your Government will determine its acceptability by actual results. In your conversations you should always fall back on the position that you are not asking for specific concessions, quotas, duty reductions or favors of any kind; your Government merely asks that the treatment provided for in the modus vivendi be accorded to our trade.
For your information and background purposes there are enclosed two memoranda prepared by the Tariff Commission23 showing the Czechoslovak imports into the United States affected by existing trade agreements; a memorandum prepared in the Department, dated September 22, 1936,23 covering (1) the application of the modus vivendi to quantitative restrictions; (2) the relation of most-favored-nation treatment to the Czechoslovak-French automobile cartel; and (3) the proposed Czechoslovak reservations regarding foreign exchange; [Page 50] and a copy of a note received from the Czechoslovak Chargé d’Affaires ad interim in Washington, dated October 8, 1936.24
Kindly telegraph on what date you present the enclosed note to the Czechoslovak authorities, as I plan to hand a copy thereof to the Czechoslovak Chargé d’Affaires in Washington on the same day.
Very truly yours,