711.60F/10–1146: Telegram
The Acting Secretary of State to the Ambassador in Czechoslovakia (Steinhardt)
1420. Urtel 1774, Oct. 11. Re recommendation $50 million Eximbank funds reconstruction credit should continue ear-marked for Zecho. Dept requested Bank suspend “until further notice” all negotiations with representatives Zecho Govt for credits. While NAC Jan 29 approved consideration by Eximbank credit Zecho and Board Directors Bank decided May 8 representatives Zecho Govt be informed Bank prepared extend credit when and if negotiations between US and Zecho on collateral issues successfully concluded, loan has not been formally authorized on records Bank.
Under these circumstances funds are now informally earmarked for Zecho and will continue held pending final action by Bank Board but with funds decreasing to low level, Dept cannot guarantee that [Page 237] funds for Zecho loan will not be committed elsewhere for more urgent and important applications. Policy re further economic assistance Zecho moreover continues governed by considerations pointed out in Delsec 986 Sept 24 as quoted Deptel 1343 Nov 7.