611.60F31/105
The Minister in Czechoslovakia (Wright) to the Secretary of State
[Received September 17.]
Sir: As of possible interest—although the points of view of the individual chiefly concerned may already be known to you—I have the honor to report the general trend of a conversation which I had on the 2nd instant with Dr. Ferdinand Veverka, Czechoslovak Minister to the United States, with regard to the negotiations which may be undertaken toward a Trade Agreement between the two countries.
The fact that Dr. Veverka, with his family, has been in Czechoslovakia for some weeks—although he has but recently come to Prague—has confirmed the impression which I had gained from other sources that the negotiations would be postponed. He is under the impression, however—whether from information obtained in Washington or in Prague, I could not tell—that the preliminary conversations might be resumed later this year, rather than early in 1936 as has been predicted in other quarters.
He began by voluntarily expressing the opinion that your policy of mutual tariff reduction was the only path that would definitely lead to a permanent improvement of the world economic situation—adding that in his opinion the United States was the only market for Czechoslovak products and that he had expressed this belief to Dr. Beneš and to other competent officials of his Government. He furthermore agreed that jealousies and friction arising from the restrictions caused by quotas, exchange control, et cetera were accountable for at least sixty per cent of the international tension as now discernible from a central European standpoint.
The Department can perhaps judge better than I whether these expressions of opinion are merely lip service to the principles which you have so clearly announced and so unwaveringly supported. I am inclined to the belief, however, that Dr. Veverka is expressing his genuine conviction in this regard, and this belief is heightened by the thinly-veiled disgust with which he referred to the methods and the individuals who interposed obstacles to the fruition of such a policy. In order to improve the opportunity thus presented not only to draw him out a bit but to inform him of the methods which I had employed at this end, I told him of my several conversations with the Chief of the Economic Section of the Foreign Office, the leading officials of the National Bank, the representatives of the Metals Industry and the statements which I had made and the observations which I had obtained during my several trips to the interior of the country. I then told him that I had informed Dr. Beneš personally of the objects [Page 153] which I was endeavoring to attain and the methods which I had employed and, further, that Dr. Beneš had confirmed my assumption that he was entirely willing that the matter should be dealt with at this end through the competent officials—with the understanding that I might approach him at any time in order to discuss the principal points of the policy involved. Dr. Veverka approved with considerable enthusiasm this procedure and stated that Dr. Beneš had already informed him in this sense and had expressed his approval.
After a subsequent discussion of certain relatively minor details Dr. Veverka surprised and interested me by expressing his belief that “sooner or later the Czechoslovak automobile interests would have to come to terms”. As this remark might be interpreted either as referring to exorbitantly high prices and duties as well as quota restrictions on the one hand, or to the elusive matter of the alleged preference in favor of French motor cars on the other, I deemed it wiser not to press the point at that time—especially as he expressed a desire to converse with me later and in greater detail when he shall have concluded his conversations with various officials and manufacturers. With regard to the first of the foregoing assumptions, I can testify by personal experience to the increasing exasperation of the public at the exorbitantly high prices demanded by the Czechoslovak automobile manufacturers and the almost prohibitive duties levied on cars of foreign manufacture. The alternative assumption finds some support in the fact that Dr. Veverka indulged in quite frank criticism of certain phases of French policy—the economic side of which has to do with this report and the political phase of which will be reported in a separate despatch.
I found Dr. Veverka equally critical of the Czechoslovak-German Clearing Agreement24 and his criticism of a system whereby German agents in Hamburg and Bremen obtained knowledge of the quantity and value of importations into Czechoslovakia was even more caustic than those expressed by officials here and which I have previously reported. He referred especially to the importation of metals, particularly of copper, and informed me that he had already been in consultation with certain representatives of the Czechoslovak Metals Industry in order to assist if possible in a program whereby reserves of metals in this country might be assured. In this connection there will be recalled the correspondence between the Department and the Consul General at Prague, as well as myself, regarding this particular subject25—regarding which Dr. Veverka expressed appreciation of the advice and assistance which he had received from the Under Secretary of State.
[Page 154]With regard to the establishment of “direct trade”—whatever that may mean—Dr. Veverka expressed the earnest hope that some means might be found whereby such direct transactions could be effected, although he seemed to entertain some doubt as to whether an acceptable substitute could be found for the facilities now afforded by the organizations existing in the free ports of Hamburg and Bremen. In this connection it will be recalled that Dr. Stangler of the Foreign Office informed me months ago that his Government would be willing to deal directly in negotiations affecting such important commodities as cotton and copper, for instance, even at the price of dispensing with the facilities now afforded at those ports. What methods of financing would be necessary to achieve this result, whether competent Czechoslovak citizens could be found who would become residents of the United States in order to concentrate these negotiations, whether equally competent Americans might be available to conduct similar activities here, and what facilities might be afforded the latter in case of their selection, I am unable to say: possibly the Department may care to take these factors into consideration in connection with such information as it may be able to give me with regard to the possibility of such “direct trade”.
Respectfully yours,