The Acting Secretary of State to the Ambassador in Czechoslovakia ( Steinhardt )
278. From FEA. Eximbank had made firm offer to Czechs to finance one year’s supply American cotton. This quantity estimated as up to 100,000 metric tons (over and above UNKRA supplies) which if all used will amount to about 44 million dollars and produce 700 million yards cloth. Interest 2½ Per cent, repayment 15 months after delivery and acceptance of cotton in Zecho.13 Czechs may requisition cotton as needed up to total amount but will be obligated only for quantity actually received and accepted. Eximbank requires guarantee by Zecho National Bank or other appropriate fiscal agency. Zecho mills will initiate purchase directly with U.S. shippers. After receipt and acceptance of cotton in Zecho, Eximbank will take over entire loan. Similar offer being made simultaneously to other cotton consuming countries. Bank ready to act within 10 days. Speed in accepting offer therefore urgently desirable.
Dept suggesting that cotton be shipped from west either by Bremen or Hamburg or via Leghorn to Pilsen. It is hoped U.S. Army authorities in Zecho may assist in distribution to mills in western textile area.
Eximbank indicates similar arrangements, possibly on smaller scale, may be worked out for other commodities. Bank also states present offer will have no effect on application for larger long-term loan, for which final negotiations still pending.
This cable for your info only since Zecho Embassy Washington cabling Zecho FonOff in detail.