The Secretary of State to the Ambassador in Czechoslovakia (Steinhardt)
300. Urtel 442, October 4. Dept not in favor proposed procedure, namely suggesting that Zecho Government ask Russians to give assurance they will refrain from seizures in any event unlawful. Dept view is as follows:
- We should not attach conditions at this time to loan already proposed by firm offer of Eximbank.
- Subject, if discussed with Russians, should be brought up by US Government directly with Soviets rather than through Zecho Government.
- It is present intention of Dept when and if loan actually granted and accepted by Zecho Government to inform Soviets such loan being made for express purpose reconstruction and rehabilitation of Zecho and that US expects that cotton or resulting textiles provided under loan will not be requisitioned for Soviet army needs. In event loans to Soviets at that time under consideration such actions on their part would naturally have unfavorable effect.
For your info, Dept considering giving immediate publicity to offer of cotton credit.