560.AL/7–547: Telegram

The Secretary of State to the Embassy in France

secret   urgent

2522. For Clayton1 from Thorp.2 Urtel 624 July 5.3 Latest press report (AP Praha July 7, 1 pm) states Czecho decided accept Paris invitation.4

In any event Dept not inclined reconsider Czecho $50 million Eximbank credit at this time for following reasons:

Dept does not wish to be in position of seeming to have secured Zecho participation by offer of prospects of US aid other than those implicit in participation in Paris conference.
Question of $50 million Eximbank reconstruction loan, suspended Sept 1946, not reopened by Zech Emb here so far. Board of Directors Eximbank decided Feb 5 this credit would be considered as [Page 219] new application if question reopened. In view present policies Eximbank doubtful they would consider long-term reconstruction loan this amount.
Amembassy Praha and Dept under any circumstances reluctant reconsider Eximbank credit pending settlement several important issues now being negotiated Praha, including compensation for nationalized Amer properties. Embtel Praha 508, May 9. Urtel 186 Apr. 29.5
Dept is convinced that since Czechs are clearly eager to participate Paris talks their participation or absence will depend almost entirely on degree of Moscow pressure.

In view foregoing considerations you may wish to avoid giving Zecho representatives ECE and ITO either favorable or unfavorable indication re $50 million Eximbank credit.

Repeated to Geneva as 765. Repeated to Praha as 735.

  1. Under Secretary of State William L. Clayton was Chairman of the United States Delegation to the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, held in Geneva, April 10–October 30, 1947.
  2. Willard L. Thorp, Assistant Secretary of State for Economic Affairs.
  3. This telegram from Under Secretary Clayton at Geneva to Assistant Secretary Thorp read as follows:

    “Is there now any objection by Department consideration Czechoslovak application Exim Bank 50 million loan? If not, this might influence considerably their decision accept Paris invitation.” (560.AL/7–547)

  4. On July 4, the British and French Governments had invited 22 other European countries, including Czechoslovakia, to join them in a conference in Paris beginning on July 12 to consider economic reconstruction in Europe on the basis of the plan advanced by Secretary of State Marshall on June 5. The Czechoslovak Government in fact formally rejected the invitation on July 10. For documentation regarding the Marshall Plan and the decision of the Czechoslovak Government not to participate, see the section on the political and economic crisis in Europe and the United States response (The Marshall Plan), chapter ii, in volume iii .
  5. Not printed.