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 | FOREIGN RELATIONS OF THE UNITED STATES 1964-1968 Volume XVII Eastern Europe Department of State |
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| 47. Telegram From the Embassy in Czechoslovakia to the Department of State/1/ Prague, February 28, 1967, 1500Z. /1/Source: Department of State, Central Files, FN 19 CZECH. Confidential. 1412. Ref: Prague 1393./2/ /2/Telegram 1393, February 24, forwarded the substance of a Czech note on the gold issue. (Ibid.) 1. Czech note and increasingly active campaign to recover Nazi-looted gold point up fundamental tactical dilemma facing us on econ financial settlement: whether to (a) take active steps to conclude this affair more advantageously for US claimants in immediate or near future, (b) let pressure continue to build up to point where our failure release gold could prove genuinely embarrassing, or (c) wait for passage East/West Trade Act/3/ with subsequent MFN grant to soften hitherto adamant Czech position that initialled 1961 agreement was negotiated in good faith by both sides and is only basis for comprehensive settlement. /3/Congress took no action on the East-West trade bill during its 1967 session. 2. On basis our contacts with Czech officials since Kazan expulsion, atmosphere is now, even taking Viet-Nam into account, as good as it is likely to be for early attempt at renegotiating economic package, and I believe we should be considering concrete steps to open way for placing US-Czech relations on more rational, promising basis. Despite added leverage restoration MFN via passage of E/W Trade Act would give us in demanding higher claims settlement figure, pinning hopes on uncertain future of this legislation could leave us hanging in present limbo vis-á-vis Czechs. 3. In circumstances of post-1948 US-Czech relations, unilateral restitution of gold, despite legitimate Czech claim to it, and however heavy Czech pressure becomes, is clearly out of the question. Since we are forced to maintain logical and essential connection between claims and restitution, the trick is somehow to induce Czechs that a higher figure is in mutual interest and that they should join in working toward it. This unlikely to be achieved, however, by simply setting higher sum and negotiating downward to something both sides would be willing accept. The package must be given different, more attractive face, something Czechs can digest before they will even consider reopening question. 4. I am sure Dept also seized with this problem and is considering possible steps to solve it. Two alternatives--and I am sure others exist--appear to merit some study. First and probably most practicable would be that originally suggested in A-206, January 6,/4/ namely, a ten to fifteen year stretch out of payments in return for predetermined increase in excess of $2 million contribution Czechs agreed to in 1961. Secondly, some kind of possible bookkeeping device whereby the Czechs could pay any additional agreed amount, or portion thereof, in crowns to underwrite USG local expenditures with the dollar equivalent being remitted to the claimants. /4/Airgram A-206 reviewed U.S.-Czech relations in the light of the Vietnam war and the actions of the Czech secret police. (Department of State, Central Files, POL 1 CZECH-US) 5. Strong argument we can use in justifying increase is that in course of period of deferred payment MFN likely to be restored through passage E/W Trade Act which administration continues to press for. Realize we ourselves might have problem in releasing 22 million in gold to Czechs at present time but something can be made of fact current trade balance in US favor and Czechs likely to continue heavy US purchases. 6. We should be under no illusions Czechs will fight hard for conclusion of the 1961 accord as it stands and will exploit their public relations advantage in the matter of their right to looted gold. Consequently rather than accepting the prospect of long drawn out negotiations at the start, I would strongly favor a form of one-shot package offer to the Czechs based on adjustments within the 1961 accord. If Dept interested, would be happy to suggest in Limdis telegram increase I think we could obtain in claims figure. In any event believe we should not give detailed written reply to Czech note but should propose initiation of discussion based on plan of our own. Even if Czechs rejected it I firmly believe our tactical and public position would be enhanced by our offer of a ration-ally defensible easement which would enable the Czechs to go measurably higher on claims in the interest of removing an intractable bloc in our bilateral relations./5/ /5/In telegram 158340 to Prague, March 25, the Department of State forwarded a draft reply that outlined U.S. insistence that the gold issue had to be resolved in the context of the settlement of other outstanding financial issues. (Ibid., FN 19 CZECH) Beam
48. Telegram From the Embassy in Czechoslovakia to the Department of State/1/ Prague, April 5, 1967, 1200Z. /1/Source: Department of State, Central Files, FN 19 CZECH. Confidential; Limdis. 1642. For EUR--John Leddy. 1. It is quite obvious Czechs believe with some justification that ball is in US court on return of monetary gold and settlement economic/financial issues. For number of reasons, not least of which is strong desire to spur foreign trade and constructive economic reform, Czechs intend press both diplomatically and by propaganda means for return of gold. Closely related if not especially decisive factors are Czech prestige and fact UK and France ready to release gold. 2. Conversely I personally believe that should Czechs be offered the prospect of early release of gold, say within next two months,/2/ they could be persuaded to promise a higher figure on nationalization claims. The problem would be to establish this as a sine qua non commitment in the context of the FonOff suggestion that gold and claims be settled "separately or semi-separately" (Prague's 1596)./3/ Tactically we could endeavor to work out a linked understanding or advance agreement through which we could obtain an indication whether increase on claims would be within negotiating range. My own view is this is worth trying. /2/In telegram 1653 from Prague, April 6, Beam amplified: "Mention of 'two months' in Para 2 intended to apply to period during which negotiations would be undertaken rather than to actual release date for gold which probably not feasible." (Ibid.) /3/Telegram 1596, March 25, reported on discussions with Czech officials at the time of the March 24 delivery of a U.S. note on the gold issue. (Ibid.) 3. One method would be to accept principle of FonOff Feb 24 note (Prague's 1393)/4/ of gold return and immediate payment to US of $2 million balance on claims with added proviso Czechs would agree to negotiate immediately thereafter higher claims settlement. Incentives we could offer would include (a) ten-year or longer stretch-out on payment of increment; (b) removal of Czechoslovakia from Treasury Circular 655; (c) US export licenses for miscellaneous goods purchased by Czech firms in 1948; and (d) release of blocked Czech assets (to be offset by Czech release of US Army crown account and special crown "film account"). /4/See footnote 2, Document 47. 4. More practicable approach would probably be to advise Czechs informally we desire to release gold at an early date and have certain suggestions for settling claims at same time. They by now must understand our domestic political problem and we are prepared to take theirs into account by proposing modalities which would make an upward claims settlement easier for them. These would include incentives (a) through (b) above plus a willingness to fund their present offer of $2 million into an enlarged total within the stretch-out period. We could then ask Czechs to consider giving us early indication how much such suggestions would be worth to them in terms of an increase which would produce a final settlement and remove major long-standing irritant in bilateral relationship. 5. I do not think potential benefits of East/West Trade Act should be introduced into claims picture at this stage. We can nevertheless argue that payment of a higher figure will be facilitated by a likely increase in trade during a ten-year stretch-out. I do believe, however, eventual resumption for debt service on bonds will depend directly and decisively on restoration of MFN and accrual of hard currency. 6. The UK experience with the Czechs in above general regard is illuminating although not entirely satisfactory and we can telegraph a brief summary furnished us by UK Embassy if information unavailable in Washington. Beam
49. Telegram From the Department of State to the Embassy in Czechoslovakia/1/ Washington, April 11, 1967, 7:57 p.m. /1/Source: Department of State, Central Files, FN 19 CZECH. Confidential. Drafted by Phelps, cleared by EE and Stoessel, and approved by Stoessel. 173162. 1. Duda called on Stoessel April 11, on instructions his Government, to reiterate Czech position re gold. Indicated some disappointment with US interim reply March 25/2/ and expressed hope that forthcoming proposals by US would be "positive." Stressed that GOC regarded US position on gold as yardstick by which sincerity of various other US pronouncements re relations with Czechoslovakia would be judged. Duda emphasized Czech view that US position linking gold with claims settlement indefensible on legal and moral grounds. /2/See footnote 5, Document 47. 2. Stoessel explained that we were reviewing our position and intend offer constructive proposals soon. He said we wish to see problem settled but pointed out negotiating history shows both sides have recognized gold and claims were linked and that it is in our mutual interest to work out solution to claims problem which would be defensible to Congress and the public. Katzenbach
50. Telegram From the Department of State to the Embassy in Czechoslovakia/1/ Washington, April 13, 1967, 7:56 p.m. /1/Source: Department of State, Central Files, AV 12-2 CZECH. Confidential; Priority; Limdis. Drafted by Christiano; cleared in E, H, EUR, S/S, the Export-Import Bank, and the Department of Commerce; and approved by Katzenbach. 175032. Ref: Prague 1685./2/ /2/Telegram 1685, April 10, reported on talks between a representative of Douglas Aircraft and Czech officials. (Ibid.) 1. Department agrees with Embassy recommendation that Ambassador call on Minister of Transport and/or Minister of Foreign Trade supporting invitation to Czech delegation by both Douglas and Boeing to visit US plants. Washington representatives of both manufacturers informed Department April 12 that invitations still stand. 2. Department concurs in Ambassador's plan to arrange such calls through MFA and recommends that approach be made soonest. Czech delegation may be encouraged to call at Department and other interested US agencies. 3. FYI. You should be aware that House Banking and Currency Committee presently holding hearings on further 5-year extension of Exim charter beyond June 30, 1968. Hearings have revealed vocal minority sentiment in favor of restricting authority of Exim to help finance exports to Communist countries. Despite such sentiment, outlook appears favorable for Exim re-chartering without restrictions. While publicity about Czech visit could complicate re-chartering approval and some publicity may be unavoidable if Czechs visit Douglas and Boeing plants, we believe invitations should be supported. Exim willing to receive Czech delegation if it comes to Washington, but you should not make specific reference to Exim in your conversations with Czechs. End FYI. 4. Wallace, Douglas representative, discussed with Department officers April 12 need to invite Czech delegation ASAP, since decision on purchase may be made within 30 days. Delegation should expect to spend 10-12 days in US. Wallace believes Czechs no longer seriously considering purchase of UK's VC-10. 5. Karlik, Director General of Czechoslovak State Airlines (CSA) informed Wallace that Czechs under strong political pressure to purchase IL-62 from USSR, but that Karlik prefers US aircraft and needs USG help to continue having Boeing and Douglas considered. Thus, Karlik believes that approach by Ambassador would give CSA another opportunity to press for US aircraft. Katzenbach
51. Telegram From the Embassy in Czechoslovakia to the Department of State/1/ Prague, July 10, 1967, 1630Z. /1/Source: Department of State, Central Files, POL CZECH-US. Confidential; Limdis. 55. 1. As Department will have noticed, current international situation seems to have furnished Czechs with new pretext for hardening official attitudes toward US in recent weeks. 2. We have the impression that the regime in its immediate outlook is motivated by purpose of isolating and ostracizing the US, and even insulting and humiliating us. Another fact is perhaps regime's frustration stemming from US failure to liberalize trade (MFN) and to take other steps in the economic/financial area. FonMin hard-liners have gone so far as to represent return of looted Czech gold as a make-or-break issue. 3. Czechs apparently feel they can pursue their present course with impunity because of recent successful effort to acquire international respectability. For them this is what Montreal is all about/2/ and they actively push same goal in exchanges of state visits with our Western allies. Against this background what they appear to seek especially from the US as still readily attainable is a continuation of scientific and academic grants for selected Czech nationals in pursuit of technological know-how. We know Czech authorities attach considerable importance to such programs. They have taxed British with not coming anywhere near the some 200 grants (official and private) extended to Czechs in US. /2/Reference is to the Montreal "Expo '67" world fair. 4. I believe that without entering on any irreversible steps and certainly without altering our present visa and tourist policies, we should be thinking about how we might scale down the advantages Czechs derive to a level more consistent with state of bilateral relations they have imposed. 5. Starting with US Government grants, we should review those of predominantly Czech benefit mostly in physical and engineering science with a view to a selective non-renewal for successor candidates. Word that time and atmosphere are not opportune could also be discreetly passed to some of US academic groups sponsoring ambitious programs for Czechoslovakia. Even though some exchanges of special interest to us might suffer, the message would soon get across to authorities here that they cannot continue with their present policies without paying a price. 6. It might also be wise to discourage prominent American visitors from coming to Czechoslovakia for prestige purposes until such time as there are signs they will be properly received. Our government spokesmen, and especially those on speaking trips throughout US, could perhaps counter Czechoslovakia's more blatant distortions of fact on international and bilateral issues in a manner which would get back to policymakers here. External media, including VOA, could also play a part. 7. On other side of the coin and specifically with reference to economic relations where we may shortly confront Czechs again, I recommend we proceed in a straightforward manner, not only as a matter of equity but also wise expediency. Our suggested approach has been set forth in a series of messages, in particular Prague's 1642, April 5,/3/ and we feel strongly that demands for a substantially higher figure on claims would be unattainable and counterproductive. We would not expect Czechs to accept every offer the Embassy has proposed (thus placing US domestic embarrassment of an immediate return of gold under present international conditions), but effort would at least help deflect a head-on clash while affording an opportunity of engaging Czechs in faith so discussion of a settlement that would be feasible and fair. [sic] We have promised to follow up on their March request for return of gold and I hope that our response will not be much longer delayed. /3/Document 48. 8. In short, while believing we should match Czech actions by bearing down in some of political and prestige areas first mentioned, we think our long-term interests would be safeguarded by showing for our part we are amenable to this type of businesslike approach, including such pragmatic initiatives as bilateral air agreement and continuing alleviations in trade. Beam
52. Telegram From the Department of State to the Embassy in Czechoslovakia/1/ Washington, November 10, 1967, 0118Z./2/ /1/Source: Department of State, Central Files, FN 19 CZECH. Limited Official Use; Immediate. Drafted by Batjer, cleared in EE, and approved by Leddy. Repeated to Brussels for Petrow. /2/Beginning in 1967, the dates and transmission times of all outgoing Department of State telegrams were in six-figure date-time-groups. The "Z" refers to Greenwich mean time. 67657. Subject: Gold/Claims. 1. Leddy-Duda meeting held November 8. 2. Prior to presenting Duda with Aide-Memoire on settlement of outstanding US-Czech economic questions, Leddy stated we have completed thorough and exhaustive review problems unsettled issues of claims and gold in sincere effort find solution which might be mutually acceptable. As result this review would like to lay on the table, for purposes discussion, proposal which we hope might commend itself to Czech Government as basis for beginning serious negotiations. We do not put this forward in spirit of "take it or leave it," but rather as contribution to discussion and in spirit of seeking accommodation in order to achieve a fair settlement all around. 3. Leddy then reviewed elements proposal: First, proposal embraces: a) Settlement of claims. b) Settlement of blocked Czech funds in US and blocked US funds in Czechoslovakia. c) Question of Czech dollar bonds. d) Release to Czechoslovakia of accumulated social security payments under Treasury Circular 655. e) Regularization of payments situation under Surplus Property Agreement. f) Immediate release of Czech gold upon conclusion of agreement. Second, with respect to claims: a) Are proposing settlement which would both give credit to Czecho for full value ($17 million) of steel mill and also be as equitable to Czechoslovakia as average of our settlements with other socialist countries. In addition, we are proposing methods of payment which take into consideration balance of payments situation of Czechoslovakia. Essential elements: (1) Original claims filed were $300 million. (2) After hearings, Foreign Claims Settlement Commission established figures of $72 million of principal plus accrued interest of $41 million, or total of $113 million. (3) US proposal is: (a) settlement for total of $44 million. (This is about 61% of principal, or average of settlements with other socialist countries.) (b) Crediting of $17 million for steel mill, so that remaining balance is $27 million. (c) Spreading of payments so that only $2 million would be immediately payable and remainder over 8 years--or about $3 million yearly. Third, with respect to Treasury Circular 655 and social security payments, we estimate there is backlog of $5 million immediately available to Czechoslovakia and $500,000 annually. Pending Congressional legislation could eliminate back-payments or limit them to 12 months. We hopeful 12-month grace period will be adopted thus allowing back-payments in Czechoslovakia if agreement reached. Fourth, with respect to surplus property, 80% of past debt would be spread out over 4 years ($4 million) and only 20% immediately ($1 million). (Annual payments over and above would be $300,000.) Fifth, freeing of blocked accounts here and in Czecho would mean about $1.7 million due Czecho and $1.1 million due US--a net gain to Czecho of $600,000. Finally, leaving aside question of bond settlement, which still to be negotiated, if US proposal accepted, we estimate: a) Czechs would receive immediately some $26 million (gold $20 million, social security $5 million, $600,000 net unblocked funds). b) Czechs would have pay immediately only $3 million. Rest would be spread out over extended period. 4. After reading Aide-Mémoire and listening to Leddy presentation, Duda commented that during his visit to Prague this summer he had found GOC considered attitude of USG toward this problem as a measure of its good will to improve bilateral relations. Duda added: (a) Agreement initialed in 1961 constitutes best basis for settlement. This agreement result long negotiations. (b) He without instructions thus in no position to reply. But speaking frankly and personally he felt this proposal no basis for solution to problems. He would, however, duly transmit Aide-Memoire and Leddy comments to his Government. (c) Said $44 million claim based on exaggerations which do not correspond with actual losses. Leddy interjected that Department willing to review all claims awards with Duda or any member his staff. Leddy added war damage not included in awards. (d) Inclusion full value of steel mill not new but had been agreed to previously by USG during 1959 negotiations, he believed. (e) Outlay connection this proposal would be very heavy and couldn't believe b/p taken into consideration, particularly since trade with US worsening and likely deteriorate further under Kennedy Round. (When pressed, Duda admitted that b/p vis-á-vis US this year better than ever.) (f) He had been given impression from various Department officials that our proposal would be flexible and constructive and now disappointed. (g) Proposal creates entirely new situation. He would have to await Prague instructions before making further comment. GOC reaction may be transmitted either through Czech Embassy here or to US Embassy Prague. 5. Leddy thanked Ambassador for his comments and said he did not wish to review history of initialed note of 1961 except to add that it was initialed ad referendum and when examined by senior Department officers found unacceptable. Stressed again sincerity with which our proposal drafted. We believe it flexible. 6. Duda seemed surprised by claims figure of $44 million. He made no comment about gold and did not attack any other features of Aide-Mémoire./3/ /3/In telegram 1088 from Prague, December 8, the Embassy reported that while it had yet to receive an official reply to the U.S. aide-mémoire, Czech officials had been "stunned" by the offer, which they regarded as a "provocation." (Department of State, Central Files, FN 19 CZECH) Rusk
53. Telegram From the Embassy in Czechoslovakia to the Department of State/1/ Prague, December 2, 1967, 1130Z. /1/Source: Department of State, Central Files, POL CZECH. Confidential; Limdis. Repeated to Vienna and Munich. 1063. Subject: Political changes rumored. Rumors of political changes are common stock in trade here and until now have proved false. Recently, however, they have become so open and persistent that I, together with some of my Western colleagues, in particular the Italian and British, believe they deserve notice. 2. Some of the rumors seem extreme and go so far as to predict Novotny's replacement in the Presidency by the aging General Svoboda and assumption of party power by Party Secretary Kolder who has been visiting the UK. Presidium member Cernik's name also continues to appear in the latter connection. Whether or not these reports derive from a background similar to that which produced the spurious Writers' Manifesto published in the London Sunday Times,/2/ there may be good reasons for rumor circulation, if not for the inevitability of portending change. /2/Reference is to "Manifesto to the Western World," published in the London Times, September 3. 3. The current year has not been a good one for the regime. While the classic Communist production indices have been favorable, the new economic reform is simply not yielding intended results and is likely to run into further political and technical difficulties which may come to a head in the party plenum scheduled for the first half of the month. The writers remain quiescent for the time being but unsatisfied, while a new source of trouble has loomed from local student quarters and their reaction to police brutality in putting down the October 31 demonstration where extremely serious consequences could have resulted from a loss of life./3/ The investigation which it is announced Prime Minister Lenart will head could affect the position of the security forces. /3/The police had assaulted students holding a non-political rally in Prague. The incident provoked mass demonstrations and a student strike against "socialist illegality." 4. Over and above all of this is the general recognition that the government and the party suffer from internal confusion and are not operating efficiently. It has been reported publicly that the party's role is being re-examined and it is likely that more is taking place behind the scenes. The opportunities to speculate on possible combinations are infinite. As explained to me by a knowledgeable source, an obstacle to reform is that changes would be regarded as imputing blame and humiliation, especially for Novotny, which it is considered desirable to avoid. Even divesting Novotny of some of his functions and burdens could have that effect. 5. According to one of my Eastern European colleagues, questions of changes and reorganization were considered peripherally at the September plenum among some of those concerned. Action was deferred on the grounds that it would deviate from and go beyond the compromises and accommodations worked out at the May 1966 Party Congress. My informant thought that a larger consensus and more discussion would be required and that it was even questionable whether decisions would be reached at this month's plenum. 6. On balance, it looks as though leadership changes are in fact under consideration. Given the party's history of stability, however, and the difficulties of selecting a new team acceptable to contending factions, the present leadership may still have time to work out tolerable solutions to its admittedly grave problems. Beam
54. Telegram From the Department of State to the Embassy in Czechoslovakia/1/ Washington, December 9, 1967, 0149Z. /1/Source: Department of State, Central Files, POL 7 USSR. Secret. Drafted by Costalanski, cleared in EE and SOV, and approved by Sonnenfeldt. Repeated to Belgrade, Bucharest, Budapest, Moscow, Sofia, Warsaw, and Berlin. 82369. Following summaries two INR Intelligence Notes 975 and 978 sent Secretary December 7 and 8:/2/ /2/Neither found. Brezhnev's December 8 arrival in Prague on unexpected "short friendly visit," on eve of Czechoslovak Central Committee Plenum reportedly to deal with leadership changes, adds another imponderable to confused Party-Government leadership situation in Prague. Visit comes in midst of persisting rumors in Prague of impending top leadership changes, most of them involving Party First Secretary and President Novotny. Whatever merit of rumors, it is incontestable that recent failures in Czechoslovak foreign and domestic policies have increased disaffection and dissension within Party to such extent they pose most serious challenge to stability of Novotny leadership in more than decade. While no single Party leader or faction has emerged to threaten directly Novotny's position, his authority and prestige appear to have been eroded considerably over past months. Arrival of Brezhnev "at invitation of Czechoslovak Party and Government" injects element of possible Soviet intervention in Czechoslovak leadership developments. Although Kremlin undoubtedly reluctant to interfere in Czechoslovak affairs, it may feel it has no alternative to action intended to insure stable regime in Prague. Soviets undoubtedly realize any interference would render them liable to charges from Chinese and others of crass interference in affairs another party and possibly unite Czechoslovak party against Soviets, as nothing else could. Should Novotny be deposed in wake of Brezhnev visit, Soviets could escape these charges. Probable that Novotny instrumental in having Brezhnev visit Prague, in effort to shore up his position and obtain Soviet sanction for any measures he may take, including personnel changes in leadership, to give appearance of coping with political, economic, and cultural-ideological difficulties. Soviets probably prefer to have Novotny remain in power, since he known quantity to them. Moreover, he could hardly be faulted for not supporting Soviet foreign policy positions on such matters as Sino-Soviet dispute, International Communist Conference, etc. since he long one of strongest Soviet supporters among ruling Communist leaders. Rusk
55. Telegram From the Department of State to the Embassy in Czechoslovakia/1/ Washington, February 13, 1968, 1630Z. /1/Source: Department of State, Central Files, POL 1 CZECH-US. Confidential. Drafted by Batjer, cleared by Costalanski and USIA, and approved by Lisle. 114361. Subject: Policy Recommendations and Assessment. Ref: Prague 1304 and A-344./2/ /2/In telegram 1304, January 30, the Embassy outlined its recommendations for future negotiations with the Czechs, cautioning against a precipitous opening to the emerging Dubcek regime. (Ibid.) Airgram A-344, January 26, outlined the changes that had taken place in Czech politics and assessed the problems facing the nation's new leaders. (Ibid.) 1. Embassy's policy recommendations and assessment welcomed. 2. Since political, social and economic situation in Czechoslovakia still very unclear and obviously in state of flux, believe our posture at moment should in general be one of responsiveness to positive Czech approaches without attempting to precipitate Czech action. 3. Agree position of new First Secretary Dubcek cannot be properly evaluated at this time because lack concrete information on his past performance and his future intentions. Even if his intention is one of Czechocentrism, road to this goal likely to be long and tedious if bloc political crisis to be avoided. Before he can begin to direct Party and Government on internal or external matters he must gain control Party apparatus, a feat still not accomplished and one which may take months. 4. While Dubcek solidifying position, internal affairs continue drift or be handled in interim manner, i.e., student unrest, intellectual ferment, and all important economic reform. As initial high hopes of progressives and of watching public cool, interim solutions may fall apart and deepen Czech crisis forcing Party to take firmer position re internal matters and to submit to bloc pressures. 5. If Dubcek and company intend develop more independent posture and able do so, they will certainly see need to improve relations with West, including US. There are many obvious ways available to them to indicate this desire. 6. Department will comment on Embassy's specific recommendations by septels/3/ except for bilateral civil air negotiations which successfully concluded Washington, February 9,/4/ and Brno Fair in which Czechs already advised we will participate. /3/The Department of State's comments concerning cultural policy were forwarded in telegram 114460, February 13. (Ibid., EDX CZECH-US) Its views on a consular convention were the subject of telegram 115967, February 15. (Ibid., CON 4 CZECH-US) It commented on social security issues in telegram 116878, February 16. (Ibid., PS 14-4 CZECH) The Department outlined its views on the gold issue in telegram 117516, February 19. (Ibid., FN 19 CZECH) It dealt with trade mission negotiations in telegram 125298, March 6. (Ibid., TP 7) /4/The second round of discussions on an air transport agreement commenced on January 22. For text of the civil air agreement, signed at Prague on February 28, 1969, and entered into force the next day, see 20 UST 408. Rusk
56. Memorandum of Conversation/1/ Washington, March 21, 1968. /1/Source: Department of State, Central Files, POL CZECH-US. Limited Official Use. Drafted by Stoessel. The meeting was held in Ambassador Duda's residence. SUBJECT PARTICIPANTS I lunched alone today with Ambassador Duda at his residence. The following subjects came up in the course of our conversation. 1. Czechoslovak Political Developments. The Ambassador said he expected that Novotny would bow to public pressures and would resign his post as President in the very near future./2/ /2/Novotny resigned on March 22. The Ambassador felt that the Central Committee Plenum on March 28 would be very important. He anticipated that, at this meeting, an action program would be elaborated and that a number of personnel changes in the government would be decided. He thought that the action program would include various measures designed to further the process of democratization in his country. Among these, he anticipated that an increased role for the Central Committee would be provided for and that the police would be "brought under control". Various proposals are being considered with regard to this question, but the Ambassador thought that the most likely solution would be for the police to be removed from the Ministry of Interior and to be put under the authority of the Minister of Justice. The Ambassador also felt that the action program would direct Czech foreign relations in general terms, indicating a desire for good relations with all countries regardless of ideological considerations. He said that, realistically speaking, it must be recognized that the Viet-Nam conflict posed a problem in US-Czech relations; nevertheless, he felt that, within the limits imposed by this situation, the new leaders in Prague would wish to improve relations with the United States. The Ambassador repeatedly expressed his pleasure at changes taking place in Prague and said he was confident that things were moving in a desirable direction and would continue to do so. He ruled out any "foreign intervention" (obviously meaning from the Soviet side), although he acknowledged that, if civil strife developed and there were bloodshed, the situation could change radically. However, he did not anticipate that matters would go this far. 2. Extradition of General Sejna./3/ The Ambassador spoke with great seriousness about this case. He observed that it was ironic, to say the least, that Sejna, who represented the worst element of the "conservative" clique in Czechoslovakia, should find a haven in the United States. He stressed that the Sejna case was of political importance and said that it would be most unfortunate if the main problem with which the new leadership had to deal in its relations with the United States was a refusal to extradite Senja. The Ambassador said he was particularly concerned about the possibility that Sejna might be exploited in this country on TV and in the press. He mentioned that he had seen several days ago in The Washington Post an indication that Sejna might appear on "Meet the Press". He felt that this would be greatly resented in his country. /3/Major General Jan Sejna, head of the Communist Party apparatus within the Czech Defense Ministry and close collaborator of Novotny, defected on February 25, following revelation of a plan to use military units in support of Novotny. The Ambassador added that he expected to be seeing me within the next few days to present additional evidence from Prague concerning Sejna's criminal activities. In responding to the Ambassador, I agreed that the Sejna case had its ironic aspects; however, it should be understood we had not sought Sejna out--he had come to us. I remarked that, as the Ambassador was well aware, we were handling the request for his extradition in strict accord with the provisions of our Extradition Treaty with Czechoslovakia. Consideration of such a request was time-consuming. In the meantime, there was no intention on our part to exploit the case through publicity, and I certainly did not anticipate that the General would be appearing on any TV program. The Ambassador appeared to take special note of my last comment. 3. Trade and Gold/Claims Negotiations. Other than the immediate question presented by the Sejna case, the Ambassador observed that the two outstanding problems between our countries were in the field of trade and gold/claims matter. On trade, the main question is obviously that of most-favored-nation treatment for Czechoslovakia. Ambassador Bohlen had told him this morning/4/ that liberalizing trends in Czechoslovakia might have a favorable impact on Congressional representatives in considering most-favored-nation treatment for Czechoslovakia; the Ambassador felt this might well be true, although he was not optimistic that any favorable action on MFN would be taken during this calendar year. /4/No memorandum of this conversation has been found. I said that I would not dispute the Ambassador's conclusion, although I certainly agreed with Ambassador Bohlen's remarks to him, and thought that sooner or later the trend of events in Czechoslovakia, if continued, would produce favorable results. On the matter of gold/claims, the Ambassador said that, as we knew, the authorities in Prague took a very negative view of our proposals. However, on his advice, the Czech side had held off giving us a formal, negative response to our note. The Ambassador hinted that, given the political uncertainties in the United States at this time, it might be considered advisable to leave the whole question open pending our elections in November; thereafter it might appear that the United States would be willing to take a more forthcoming stand on the problem. I emphasized to the Ambassador that the gold/claims problem was not really political in nature, and I strongly discouraged him from thinking that our election could affect our position on the problem one way or the other. Regardless of the Administration in power, or of its views concerning improving relations with Czechoslovakia, the fact would remain that we had a very large outstanding claims settlement still pending with Czechoslovakia and the interests of the U.S. claimants had to be taken into account. I reminded the Ambassador that our proposal had not been made on a take-it-or-leave-it basis./5/ While we felt that our proposal had been a reasonable one, and certainly any counter-proposal would have to be "in the ball park" of the general framework sketched out in our proposal, we would welcome suggestions from the Czech side as to how they would envisage a settlement. I felt that a completely negative Czech response would be regrettable and I urged the Ambassador to consider the possibility of further discussions with us of the problem. /5/See Document 52. 4. Export of Czech Airplanes. The Ambassador mentioned in passing that his Embassy would be in touch with the Department in the near future in connection with sales possibilities for light Czech airplanes and gliders in the United States. He said he had already received hundreds of inquiries from California about such products and he hoped that a good market could be developed in the United States for these items. 5. The Ambassador did not raise at any point the question of security in Washington of official Czech installations. [Continue with the next documents] Volume XVII Index | Foreign Relations Online | Historian's Office | |