Current Economic Developments, Lot 70D467
Current Economic Developments
No. 200
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Negotiations With Czechs for Settlement of Claims Adjourned
Washington negotiations for settlement of US compensation claims against Czechoslovakia were adjourned on May 3 and the Czech delegation has returned to Praha.1 Three plenary sessions were held during which little progress was made. The unsatisfactory nature of the [Page 399] meetings was caused in part by the defection of Skala, a high ranking member of the Czech delegation, who, shortly after arriving in this country, resigned to seek asylum here.
During the course of preliminary discussions held in Praha in February the Czechs agreed to a continuation of the negotiations in Washington. (See page 4, March 7, 1949 issue of Current Economic Developments.2) The purpose of the preliminary discussion was to obtain this agreement, and to bring out the chief issues concerned in arriving at a compensation settlement for property of US citizens which was nationalized by the Czechs.
During the Washington meetings which began on April 22, the US proposed an agenda which would settle the issues left unsettled in Praha, such as the question of crown investment, dual nationality and beneficial ownership, prior to consideration of the amount of a lump-sum settlement. However, the Czechs indicated that, as a result of Skala’s resignation, they would require additional information and personnel from Praha in order to discuss these issues. They preferred therefore to start with a discussion of the amount of the settlement and possible US concessions, pointing out that these two items were interdependent. They proposed payment of $20–$25 million subject to favorable US action on loans and export licenses. The US delegation stated that this figure was too low, pointing out the previous drastic reduction of the US claim in order to reach a settlement. The Czechs discovered that they could not defend their figure or reduce the US figure of $45 million without thorough discussion of the disputed issues. In response to their professed desire for a case-by-case analysis to ascertain the correct settlement figure, we proposed a mixed tripartite commission to examine the facts and adjudicate claims. Although the Czechs agreed to transmit this proposal to Praha, they indicated that they preferred to retain the problem within the scope of the two governments rather than to subject claims to an impartial third party. After some consideration of the case-by-case procedure, the Czechs realized that it was not feasible to approach the negotiation of a settlement from this direction because the outcome of the disputed issues would affect various categories of claims, which in turn would affect the total amount of settlement. They then suggested that negotiations be adjourned to permit their return to Praha to secure additional information and assistance on these issues. The delegation indicated its firm intention to return to Washington prepared to discuss [Page 400] these issues, and we will supply the Czechs with our basic positions thereon. One member of the Czech delegation remained here to do some of the preparatory work for future meetings.
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- The United States Delegation to these negotiations was headed by Paul H. Nitze, Deputy to the Assistant Secretary of State for Economic Affairs. The Czechoslovak Delegation was headed by Deputy Minister for Foreign Trade Evžen (Eugene) Loebl. Dr. Hugo Skala, Chief of the Planning Section, Minister of Finance, was one of his principal assistants.↩
- For the item under reference here, see p. 385.↩