711.60f 2/6: Telegram

The Secretary of State to the Minister in Czechoslovakia ( Einstein )

38. Your 41, September 26, 4 p.m.

The United States is prepared to meet the desire of the Czechoslovak Government to omit the word “quantities” from the proposed exchange of notes and to mention in the notes the date on which the provisional agreement shall come into force, a definite period for its duration in the event of the treaty not being concluded, a time limit for denunciation thereof, and an exception of special arrangements of Czechoslovakia with Austria and with Hungary. Accordingly you are authorized to replace the whole part of the draft for an exchange of notes proposed in the Department’s 35 of September 6, coining after the word “whereby” with the following:

“the products of each country will be admitted to importation into the territories of the other on terms not less favorable with respect to valuation, import duties and other similar charges than the products of any other country; that similarly in the matter of exportation, treatment not less favorable will be accorded with respect to valuation, export duties and other similar charges; and also that in the matter of licensing each Government so far as it maintains the system of licensing will assure to the commerce of the other treatment as favorable as may be accorded to the commerce of any other country.

My Government would understand that the most favored nation treatment which is hereby agreed upon shall become operative on the day on which this exchange of notes is consummated and shall continue until the first day of January 1925, but that nevertheless either the United States or the Czechoslovak Republic may discontinue such treatment to the commerce of the other country provided it shall thirty days before such discontinuance give to the other notice of such intention.

The United States will not invoke the provisions of this agreement to obtain the advantages of any special arrangements which have been or may be concluded between the Czechoslovak Republic and Austria or Hungary in pursuance of the economic clauses of the [Page 872] treaties of peace with Austria and with Hungary, and it understands that the Government of the Czechoslovak Republic will not invoke the provisions of this agreement to obtain the advantages which are or may be accorded by the United States to the commerce of Cuba or which are or may be reserved to the commerce of the United States with any of its dependencies and the Panama Canal Zone under existing or future laws.

I should appreciate a communication from Your Excellency giving assurances that most favored nation treatment in the sense of this communication will be accorded by the Government of the Czechoslovak Republic to commerce with the United States pending the conclusion of a general treaty between the two countries, or until the first day of January 1925.”

Under such a provision in regard to the matter of licensing as is proposed in the foregoing draft each Government would assure to the commerce of the other treatment in a general way as favorable as it may accord to the commerce of any other country. The United States recognizes that such treatment would not necessarily involve an undertaking by Czechoslovakia to license the importation and exportation of each commodity in the commerce between the United States and Czechoslovakia in the same quantities as in the commerce of Czechoslovakia with other countries. The situation with respect to American commerce might be such that equality of treatment would be satisfied with the licensing of smaller quantities of certain commodities and would demand the licensing of greater quantities of others.

As such a situation admits of the possibility of difference of opinion between the two Governments as to whether at any time the principle of treatment on a basis as favorable in general as that accorded the commerce of any other country is maintained, it is desirable that each country be at liberty to cancel the arrangement now proposed on short notice in the event that such differences of opinion arise. You should make the foregoing explanation orally to the Czechoslovak authorities in connection with the proviso for notice of termination at the expiration of thirty days. For your information. Freedom of action to cancel the provisional arrangement at short notice is particularly necessary for the United States because of the provisions of Section 317 of the Tariff Act of 19226 directing that the President after investigation and recommendation by the Tariff Commission shall impose additional duties on importations from countries which discriminate in fact against the commerce of the United States.

  1. 42 Stat. 858.