FOREIGN RELATIONS, 19 4 6) VOLUME VI



860F.24/8-1446: Telegram
The Ambasador in Czechoslovakia (Steinhardt) to the Secretary
                            of State

RESTRICTED                       PRAHA, August 14, 1946-11 p. m.
                                 [Received August 16-7: 40 p. m.]
  1511. Embassy is today in receipt of a note from Foreign Office
dated August 3 which reads as follows:
  "Minister of Foreign Affairs presents its [his?] compliments to
Embassy of the United States and has the honor to draw the attention
of the Embassy to several cases of discrimination in connection with
purchases of American surplus war property.
  While the Czechoslovak Government applied to the Government
of the United States for a loan of $50,000,000 to purchase American
surplus war property and negotiations took place in Washington, the
Government of the United States concluded a commercial and finan-
cial agreement with the Government of France ceding at exceedingly
favorable terms all surplus war property which was on the territory
of France at the date of conclusion of that agreement.52
  As under these circumstances the surplus war property on territory
of France is no longer accessible to other states, the purchase possi-
bilities for Czechoslovakia have been considerably reduced. Minister
of Foreign Affairs further wishes to point out that, despite the credit
agreement between Government of the United States and Govern-
ment of Czechoslovakia for purchasing American surplus war prop-
erty, an agreement which covers all American military stores on
European continent, the French Government has been granted priority
rights for purchases of American war surplus property on territory
of Belgium, Germany and Italy.
  Further the Minister of Foreign Affairs wishes to point out that
Czechoslovak delegates at United States of America Office of Foreign
Liquidation in Paris have several times endeavored to obtain from
that office a contract for delivery of a large quantity of tires.
  So far, however, their demand has not been granted though in the
meantime delegates Swedish and Swiss Governments have secured con-
tracts for delivery of tires.
  The Czechoslovak Government welcomed at the time with satis-
faction the understanding shown once more by the Government of
the United States for the economic difficulties of Czechoslovak Re-
public in granting a loan to amount of $50,000,000 for purchase of
American war surplus property. Czechoslovakia concluded that
credit agreement with intention of using whole amount of $50,000,000
for purchases out of abundant American surplus war property to
cover at favorable terms its most important needs for the economic
reconstruction of the country. In view of above mentioned discrimi-
nations, however, the purchase possibilities for Czechoslovakia have
"2For texts of the financial and commercial agreements between the United
States and France, signed at Washington on May 28, 1946, see Department of
State, Treaties and Other International Acts Series (TIAS) No. 1928; United
Nations Treaty Series (UNTS) No. 84, p. 59; or 61 Stat. (pt. 4) 4175.



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