8 Although as early as April 25, 1922, I had the honor to inform the Government of Czechoslovakia of the creation of the World War Foreign Debt Commission and of the desire of that Commission to receive any proposals or representations which the Government of Czechoslovakia might wish to make for the settlement or refunding of its obligations to the Government of the United States, it was not until May, 1923, that representatives of the Government of Czechoslovakia commenced negotiations with the World War Foreign Debt Commission in Washington, and although nearly two years have elapsed since the visit of the Czechoslovak Debt Commission,sa no proposals have been received by the World War Foreign Debt Commission for either the settlement or the refunding of the indebtedness of Czechoslovakia to the United States which as of November 15, 1924, amounted to $91,879,671.03 in principal amount and $23,648,768.93 in unpaid interest, a total of $115,528,439.96. With the exception of the sum of $9,376,689.69, the principal amount of the indebtedness of Czechoslovakia to the United States was incurred entirely for relief purposes, including the repatriation of Czechoslovak troops from Siberia, and among the obligations held by the United States Treasury is a relief bond, Series "A" 1920, due January 1, 1925, identical in terms with the relief bonds held by the Governments of Denmark, France, Great Britain, Holland, Norway, Sweden and Switzerland, which were the subject of the recent agreement referred to above. Under the circumstances, I am therefore instructed to state that the Government of the United States cannot agree that the Government of Czechoslovakia should make no payments to the United States on account of its indebtedness while making payments to other Governments on account of indebtedness to them incurred by Czechoslovakia for similar purposes, and that the Government of the United States will not acquiesce in any discrimination against the United States in favor of other creditor governments either through agreements such as those recently concluded or otherwise. My Government therefore would be pleased if it could receive from the Government of Czechoslovakia an appropriate proposal for the payment or refunding of the obligations of the Czechoslovak Government now held by the United States Treasury which, except for an obligation in the principal sum of $1,962,145.37, maturing June 30, 1925, are all payable on demand either in terms or because over-due. See telegram No. 1, Apr. 21, 1922, to the Ambassador in France, Foreign Relations, 1922, vol. 1, p. 399. For appointment of the Commission, see Foreign Relations, 1923, vol. 1, pp. 876 ff. 800.51 W 89Czechoslovakia/90: Telegram The Minister in Czechoslovakia (Einstein) to the Secretary of State PRAGUE, May 2, 1925—1 p. m. 12. Your instruction number 252, April 4th. Presented note today. Dr. Beneš denies any intention of discriminating against the United States by arranging payment of so-called Nansen relief bonds and believes such impression is based on misunderstanding. write me in explanation. Will EINSTEIN 800.51 W 89Czechoslovakia/90: Telegram The Secretary of State to the Minister in Czechoslovakia (Einstein) WASHINGTON, May 5, 1925—4 p. m. 11. Your 12, May 2, 1 P. M. and previous correspondence regarding indebtedness of Czechoslovakia. Should you find it necessary to discuss this matter with Dr. Beneš, you should bear in mind first that his letter of June 26, 1919, pledged his Government not to discriminate against the United States; second that the Czechs agreed to the London arrangement for refunding the relief credits extended by each Government except the United States without informing or consulting this Government or offering similar terms to it; third, that this action is in fact discrimination against the United States; fourth, that in addition to the foregoing the United States holds a Czech relief bond, due and payable January 1, 1925, identical in terms with those refunded under the London agreement; fifth, that among the terms of this bond is an undertaking by Czechoslovakia that it will make no payment in respect of any such relief bond "unless a similar payment shall simultaneously be made upon all the obligations of said series issued by the Republic of Czechoslovakia in proportion to the respective obligations of said series". Payments under the London agreement therefore violate this specific assurance. Belgium and Rumania have also similarly discriminated against the United States and this Government has made vigorous representations through the Embassy at Brussels and the Legation at Bucharest.10 KELLOGG *Note dated April 30. 10 See pp. 107 and 167. 800.51 W 89Czechoslovakia/92: Telegram The Minister in Czechoslovakia (Einstein) to the Secretary of State PRAGUE, May 16, 1925—2 p. m. 16. Your number 11, May 5, 4 p. m. 1. Doctor Beneš admitted that he had forgotten his letter of June 25 [26], 1919; if he had remembered this he would have negotiated differently with Great Britain. 2. He reaffirms the intention of Czechoslovakia to honor all her engagements. 3. On his return from Geneva where he goes tomorrow he will take up the debt question with the Minister of Finance and give me early answer. My impression is that he will settle relief bonds on the same terms as extended to other governments. EINSTEIN 800.51 W 89Czechoslovakia/101: Telegram The Acting Secretary of State to the Minister in Czechoslovakia (Einstein) [Paraphrase] WASHINGTON, July 6, 1925-8 p.m. 26. On July 6 the Czechoslovak Chargé, Dr. Lípa, conversed at the Department with Mr. Richardson, Acting Chief of the Division of Western European Affairs. Dr. Lípa stated that he was under instructions from his Government to say that it had been giving consideration to your note of May 2 regarding indebtedness of Czechoslovakia to the United States and that his Government had in principle agreed to meet all obligations toward this Government. Specifically, they agree to recognize the sum of approximately $80,000,000 verified by commission which came to Washington in 1923; to negotiate in immediate future for verifying of balance of about $11,000,000 that is still in dispute between Czechoslovakia, War Department, and Shipping Board, the verified amount on account of these items to be added to the already admitted $80,000,000; and to acknowledge the total as the sum of indebtedness of Czechoslovakia to the United States. According to the Chargé, the Government of Czechoslovakia is prepared to negotiate at once conditions of payment of the $80,000,000 verified, and to do so either through the Czechoslovak Legation in Washington or through a special mission, whichever the Government of the United States might deem preferable. Dr. Lípa stated that above points would be incorporated in formal communication to be addressed to this Government within a week or so, and he wishes to ascertain if they would constitute a basis satisfactory to the World War Foreign Debt Commission upon which to begin negotiations, as his Government does not wish to send a formal communication in sense of the foregoing if the conditions are unacceptable. The Department has communicated substance of Chargé's statement to Treasury Department for its comment, and would be pleased to have you report by telegraph any information discreetly available on actual intentions of Government of Czechoslovakia. GREW 800.51 W 89Czechoslovakia/102: Telegram The Minister in Czechoslovakia (Einstein) to the Secretary of State PRAGUE, July 11, 1925-1 p.m. [Received 2:50 p.m.] 37. Your 26, July 6, 8 p.m. Dr. Beneš confirmed statement of Czechoslovak Chargé d'Affaires; other nations having expressed their wish to negotiate debt settlement Czechoslovakia no longer regards itself as obligated to them and wants to proceed independently to effect debt settlement. Dr. Beneš reported he personally favored beginning immediate payments but his view was opposed by Minister of Finance. Note regarding debt settlement would come up for final decision of Cabinet next Tuesday and would be communicated to the Legation before the end of the week. EINSTEIN 800.51 W 89Czechoslovakia/99 : Telegram The Secretary of State to the Minister in Czechoslovakia (Einstein) WASHINGTON, July 16, 1925-5 p. m. 28. Your 37, July 11, 1 P. M. On July 10 the following memorandum was handed to Czechoslovak Chargé : "The World War Foreign Debt Commission would be glad to negotiate upon the settlement of the entire Czechoslovak debt to the United States with a commission from Czechoslovakia having due power to negotiate and conclude a settlement. Arrangements could be made in the debt settlement for an appropriate adjustment of any part of the total indebtedness not now admitted by Czechoslovakia to be due. There is no reason, however, why a debt settlement need await a verification of the total since this is simply a mechanical matter of auditing the accounts, and any debt settlement should cover the entire debt whatever it is ultimately determined to be." Please keep Department informed by telegraph of further developments. KELLOGG 800.51 W 89Czechoslovakia/104: Telegram The Secretary of State to the Minister in Czechoslovakia (Einstein) [Paraphrase] WASHINGTON, July 21, 1925-6 p. m. 29. Department's July 16, 5 p. m. On July 20 the following informal memorandum was left at Department by Czechoslovak Chargé: 11 "The Czechoslovak Minister of Foreign Affairs, Dr. Eduard Beneš, thanks Secretary of the Treasury Mellon, as the chairman of the World War Foreign Debt Commission, for his communication. The Czechoslovak Government is desirous of entering negotiations to cover the entire debt, and at the same time to verify any part thereof not yet admitted to be due, so that the final settlement would cover the entire debt. It is prepared to commence negotiations upon the settlement of the debt question with the United States of Belgium, France, and Italy. A notification as to whether or not such a time would be acceptable is therefore requested. An official reply to the note of the United States Government will be dispatched about the coming Tuesday or Wednesday at the latest." Today an informal memorandum was handed the Czechoslovak Chargé stating that as far as a settlement with this Government is concerned there is no connection between the indebtedness of Belgium, France, Italy, and Czechoslovakia to the United States, and that for that reason it would not be acceptable if negotiations looking to the funding of Czechoslovakia's indebtedness to the United States were not commenced until indebtedness of the other three Governments to the United States had been settled. On the contrary it was stated that commission to negotiate settlement of indebtedness of Czechoslovakia should, as indicated in the Chargé's conversation with Mr. Richardson on July 6, 1925, come to Washington in very near future, the earnest hope being expressed that initiation of negotiations at Washington would take place not later than first week in September. KELLOGG 11 Memorandum not paraphrased. |