860F.24/9–2846: Telegram

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


1184. In accordance with policy elaborated in Delsec 877 Aug 30, Delsec 957 Sept 17 repeated to Praha as 117, Secdel 979 Sep 24 repeated to Praha as 1169 and Delsec 997 Sep 26 repeated to Praha as 124,75 Czech Emb has been informed US position re future credit sales surplus property.

Hanc advised Sep 20 by Gen Connolly (Deputy Commissioner OFLC) that his office had been instructed to make no further surplus sales for present to Czechoslovak Govt. When Hanc asked reasons for this decision, Connolly avoided explanation by suggesting inquiry of Secretary in Paris or Acting Secretary in Washington.

Hanc called by appointment Hickerson’s office Sep 24 for frank discussion of matter (memo conversation follows76). He was informed again that US Govt will carry out existing commitments for surplus sales under 50 million dollar credit arrangement but would make no new commitments. Reasons stated for cancellation unused portion credit included:

Indications of Czech tendency to misinterpret US motives in extending economic assistance to European countries as evidence in support by Czech delegation in Paris of Vyshinky’s viewpoint that US was attempting to bring about economic enslavement of Europe by policy of hand-outs;
Recent charge of discrimination in negotiation surplus property contracts;
Improvement in Czechoslovak economic conditions which place Zecho in considerably more favorable condition than such countries as Italy.
Protocol agreed to by Czechoslovak and Rumanian Govts providing for resale to Rumania of surplus purchased by Zecho amounting to 10 million dollars reurtel 1686, Sep 18.

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Upon inquiry whether suspension of surplus sales to Zecho might be lifted in future, Hanc was told that no such prospect could be foreseen.

  1. Telegram 4841, Delsec 997, September 26, from Paris, not printed, but see footnote 74, above.
  2. Not printed.