249.1111 Oatis, William N./1–552: Telegram
The Ambassador in Czechoslovakia
to the Department of State2
513. Likeliest explanation FonMin Siroky’s failure move ahead with Oatis negots is fact that Czech Govt has been using time since our Dec 7 mtg3 trying to achieve through separate efforts two of principal objectives probably originally in mind as hoped for fruits of Oatis negotiation, namely release of steel mill (or proceeds sale thereof) and circumvention restrictions natl Czech airline CSA over-flying Ger to West Eur. For Emb in those circumstances to seek renewal Oatis negot without our govts first having (1) acted to prevent Czecho acquiring proceeds steel mill, and (2) succeeded in blocking Czech aviation project, wld in our opinion have fol immediate consequences:
- Suggested approach wld inevitably lower in Czech eyes value our Dec 7 Oatis proposal and
- It wld simultaneously (in conjunction US ransom payment Hung for US fliers) whet Czech appetite still further in direction bigger and better ransom for Oatis.
Recent developments have admittedly been disheartening: FonMin has failed make good his Dec 7 statement that new mtg wld be arranged “in a few days” in order further explore US proposal, and our hopes for early Oatis release have accordingly not been realized. Impatience over situation as indicated Deptel 329 Jan 34 is not only understandable, but is abundantly shared by all of us in Emb Prague where for past eight months welfare this unfortunate fellow citizen has been our constant worry and distress. Notwithstanding foregoing, for Emb now to take suggested initiative toward resumption discussions (before there has been any response to pending Amer proposal and, more pointedly, even before steps mentioned first para have been taken re steel mill and CSA) would risk encouraging Czechs to believe Oatis ante can be so substantially raised that to disabuse their minds thereof might (and probably wld) require lengthy argument and delay, in the end retarding rather than accelerating Oatis release, or so at any rate it seems to us here.
Fol factors appear especially pertinent to study of present position:
- Three matters of prime econ interest to Czecho capable affecting Oatis negots are Czecho export trade to US; aviation access West Eur; and Czech assets in US. First two are covered in our Dec 7 Oatis proposal and last we have rightly refused relate to Oatis.
- Czechs have apparently been using four weeks since last Oatis mtg to liquidate their assets in US and transfer proceeds away from Amer jurisdiction. Insofar as Emb informed by Dept, steel mill is largest item by far and also probably one of two remaining items. Until therefore US Govt action has been taken to block mill or proceeds thereof, Czechs may go on saying to selves “Why shld we resume Oatis talks?” That is, as long as Czechs see possibility transferring value this major asset from US jurisdiction (and hence from their point of view of escaping danger of US action if Oatis negots break down) Czechs may prefer continue efforts liquidate mill rather than pursue Oatis discussion. (Emb views re importance blocking Czech transfer of value mill and equally of our refusal submit possible Czech blackmail over mill, even if our refusal should delay Oatis release, are contained Embtel 494, Dec 24.5)
- Our Dec 7 Oatis proposal to FonMin includes offer restore US market for Czech goods. Daily loss of trade is substantial (possibly around $75,000 per day) and this must be felt by Czech, but as long as transfer of assets in US, especially steel mill, remains possibility, Czechs apparently willing continue accepting daily trade loss while pursuing mill proceeds transfer arrangements.
- Failure Belgium, Holland and Denmark respond more helpfully re blocking Czech aviation is discouraging. While Czechs believe chance exists to obtain desired Copenhagen-to-Paris route, they may regard holding Oatis as good security toward resumption direct route if dog-leg negots finally fail, whereas if latter succeed, Czechs can tell us then no longer interested obtaining restoration direct route in exchange Oatis release. In that case, Czech might try substitute some new item for aviation item. So once again, until Copenhagen-to-Paris CSA project has been blocked, Czechs may ask selves “why hurry resume Oatis talks”.
Two unrelated incidents without direct connection Oatis have unfortunately been added recently to scales against Oatis. In first place, US payment to Hungary for fliers6 must have greatly encouraged Czech ransom hopes. Accordingly, expect that whenever Oatis negotiations resumed, FonMin may try to capitalize on this development. Similarly, all our future efforts on behalf other Amer cits in difficulties Czechoslovakia (Pvt Woods for example) have perhaps been rendered more difficult or more expensive by payment to Hungary for release of fliers.
Second incident, equally unhelpful in terms Oatis, was one last month involving personnel British Embassy Prague (Embtel 469, December 157 and previous). Results thus far: Disastrous humiliation British colleagues and corresponding impairment British prestige in Czechoslovakia, while “unmasking British-American espionage agents” by triumphant Czech Communists has probably convinced them anew that all Westerners including Western officials can be kicked around (and also shot at and wounded) with impunity.
While factors listed unfortunately do not justify revival hopes early Oatis release, picture is by no means all black. In case this character, temporary setbacks may be inevitable part of ebb and flow of embittered East-West relations. Granted circumstances prevailing Communist Czechoslovakia we cannot wish Oatis into freedom. In dealing with men now operating Czechoslovakia we cannot buy Oatis into freedom, except by mortgaging every other American in country. What we may do is to force Czechoslovakia into releasing Oatis, first by convincing them, (even if it takes time) that their dreams of blackmail won’t be realized, and second my making it too uncomfortable and too expensive for them to hold him.
When Oatis case is finally over, I hope Dept will be able to declare not what it cost to ransom Oatis, but what penalty Amer Govt made Czechoslovakian Communists pay for abusing Amer citizen. Cost of Oatis to Czechoslovakia to date in lost trade alone is probably at least 5 million dollars, may be nearer 10 million dollars, and the pressure is still on. That is kind of computation Communists will eventually understand and it is likewise kind of understanding leading to respect by Communists for American rights.
- As immediate next steps, I accordingly again recommend that action (as described Embtel 494, December 24) be taken with reference to steel mill; and that Czech efforts to extend CSA air route south from Copenhagen be effectively blocked. With reservation that frequent reappraisal our position is desirable, I recommend that both those steps be accomplished before approach to FonMin suggested in Deptel 329 is given further consideration.
- Transmitted in two sections.↩
- For an account of the meeting of Dec. 7, see Foreign Relations, 1951, vol. iv, Part 2, p. 1434.↩
- Telegram 329 expressed the fear that a continuation of the delay in the Oatis negotiations would give the Czech Government the opportunity to circumvent the economic and civil aviation sanctions imposed on Czechoslovakia by the United States. (249.1111 Oatis, William N./1–552)↩
- Foreign Relations, 1951, vol. iv, Part 2, p. 1437.↩
- See footnote 2, infra.↩
- Telegram 469 reported that two members of the staff of the British Embassy in Czechoslovakia, involved in an incident with the Czechoslovak police, had been shot, wounded, and subsequently expelled from the country. (601.4149/12–1551)↩