Memorandum of Conversation, by the Assistant Secretary of State (Sayre)

Participants: Mr. Vladimir Hurban, Czechoslovak Minister,
The Secretary,
Mr. Sayre.

Mr. Hurban called on the Secretary by appointment in order to deliver to him a message just received from his Government. Mr. Hurban began by saying that the situation in Czechoslovakia is grave,—“very, very difficult”. He went on to say that Germany is threatening to dominate Central Europe economically as well as in other ways. He said that his Government believed that the German Government intends the complete domination of Central Europe and that German activities seem to point to a plan of forming extensive clearing agreements with all the European countries of Central Europe except Austria and Czechoslovakia, Within the limits of such an extensive clearing agreement would be Hungary, Yugoslavia, Bulgaria, Rumania, Greece, and other countries similarly situated. The economic effect of such a union would be extensive bartering without money passing on the basis presumably of the German mark. In the words of the Czechoslovak Minister, it would be equivalent to a large monetary union. He said that Austria and Czechoslovakia would be left out of this because of German plans to dominate these two countries through political means. From the entire group trade from the other countries would be virtually excluded. In other words, the plan was German domination of Central Europe, with a closed door to the trade of every other country. The Czechoslovak Minister said that his Government had brought this matter to the attention of the British and French Governments within the last day or two and that he was now instructed to bring it to the attention of the United States Government.

In view of this development, the Czechoslovak Minister said that he hoped we would not be rigid in insisting upon the language in our trade agreement covering the Danubian preferences, for he said [Page 230]that some kind of a Danubian alliance seemed to be the only way successfully to prevent the achievement of such a German plan as he outlined.

F[rancis] B. S[ayre]