611.60F31/4–2249: Telegram
The Ambassador in Czechoslovakia (Jacobs) to the Secretary of State
urgent
603. In long view possibility some form of opposition on part (Deptel 459 April 191) Western sympathizers in Czechoslovakia as in Poland, cannot be ignored. However, before war was over Czech politico-economic structure had been predetermined by Communist Party control of basic industries through labor unions. From 1945 basis of effective opposition to Sovietization was hardly discernible even among pro-Western elements in Czech management and labor classes. Consequently, external policy of assistance might have appreciably slowed Czech Sovietization, that is Communist Party internal control and centralization of industry on Soviet pattern.
Current Czech economic hardship, related to Czech dependence on West for vital raw materials and machinery and effect of our export licensing system considered likely to tighten CP political control over daily life and speed purge of suspect officials. Though present propaganda line blames economic conditions on US policy, political consciousness of Czechs, especially of economic officials, makes them see US policy as inevitable counter-Soviet move, not aimed primarily at Czechoslovakia.
Strong Communist and Soviet controls and current powerlessness pro-Western officials make it unlikely softening our policy would achieve significant change economic policy, nor continuation hard policy be likely to alienate officials personally though it would reduce their numbers in important positions.
Czech agricultural problem basically different from Poles. Only significant Czech export is sugar which now has good market, hence external influence on collectivization along lines UK-Polish Trade Agreement not possible. Pace of agricultural Sovietization likely to be determined by availability of agricultural machinery and Communist Party assessment peasant resistance. Latter internal matter in Czechoslovakia and US influence on former too indirect to be decisive considering flexible requirements in farm machinery.
Possible long-range licensing policy of selective nature might tend to reduce future war potential and at same time preserve Czech trade contacts with West, thereby lessening economic dependence on Soviet, maintain and encourage pro-Western economic leaders traditionally stronger in light industries, encourage consumer goods industries, particularly [Page 105] ceramics, textile, leather and rubber, at expense of ambitious heavy industry plans. Selective licensing coupled with tightened control over metals would tend to direct economic development away from the heavy industries.
Due current strained Czech-US relations, possible Soviet peace feelers, and difficult Czech economic position, Embassy does not recommend imminent comprehensive change export licensing policy which is daily demonstrating futility Soviet aggressive policy. Embassy does believe in exploring possibility gradual progressive relaxation of export control on expendable goods, even durable goods, such as machine parts subject to rapid depreciation. Too sudden and drastic relaxation would be interpreted as weakness on our part and strength of their propaganda against ERP. As low and exceedingly selective modification of our export licensing policy would enable study of reaction and response, with view to expansion or contraction as ad hoc conditions warrant. We should be guided in any relaxation by factor of probability of Czech receipt of materials and equipment from European sources, and competitive efforts of our Western friends to cultivate East-West trade. But in no case should there be any departure at this time from present application of the licensing policy unless the Czechs render a quid pro quo which in the first instance should be settlement of our compensation claims.
Sent Department 603; repeated Warsaw 8.