860F.51/12–1445: Telegram

The Ambassador in Czechoslovakia (Steinhardt) to the Secretary of State

735. I regard it as desirable that a small credit, not to exceed $35,000,000, apart from the cotton credit, be extended to Czecho as [Page 557] soon as possible particularly as the Czecho Govt has not been able to collect approximately $6,000,000 for purchases and requisitions by US Army in Czecho and for coal delivered by Czecho to the US Forces of Occupation in Germany. There are minor financial operations the Czecho Govt desires to undertake immediately which require modest dollar balances and which are in the interest of a return to normal conditions of trade and finance such as the refunding of the less than 2,000,000 principal amount Czecho state 8 percent bonds held in US. There is also the element that the US Army in Germany has recently declined barter transactions and now requires payment in dollars for raw materials originating in Germany essential to the resumption of important Czecho industries, the products of which, such as window glass, repairs to locomotives and freight car, building material, etc., are important to European recovery.

Insofar as I have been able to ascertain Masaryk has been anxious to proceed to US to negotiate a loan. I assume therefore that it would be entirely agreeable to him to proceed to Washington from London as soon as his duties at the UNO20 meeting permit and I accordingly suggest that the Dept may wish to communicate with him through our Embassy in London.

  1. United Nations Organization.