Foreign Relations of the United States, 1964–1968, Volume XVII, Eastern Europe

63. Telegram From the Embassy in Czechoslovakia to the Department of State¹

Prague, May 28, 1968, 1735Z.

2237. Subj: Call on Foreign Minister.

1. I called on Foreign Minister Hajek this morning. Sixth Section Chief Trhlik also present but did not, except as noted, take part in conversation. Talk lasting over hour dominated by gold/claims issue. In this specific connection as well as his general tone Hajek cast something of pall on hope I expressed for better relations.

2. I began talk by stating US following Czechoslovak developments with constructive interest and intensive study at all government levels, and that our reaction both public and official has been restrained, taking account of Czech problems. Noting US policy response to changes such as these tends to be calm and deliberate, I stated movement likely to be in future rather than immediate and pointed out I had brought back nothing definitive from Washington although we hoped talks on substantive matters could begin weeks or even days.

3. Hajek replied that my report afforded “certain hope” for improvement in relations, present level of which not very high, in fact “far from normal.” He asserted, however—a point he repeated later—that improvement up to us. He said he had returned to MFA after several years’ absence to find same US–CSSR bilateral problems as in 1962 and professed to see not only no progress but even “certain deterioration” and hardening of US position in areas where Czechs wanted to cooperate in removing obstacles.

4. I observed it unfortunate when tone from past leaves us with many problems but said we now should work for improved atmosphere. I noted there have been some changes for better: expansion of mutually beneficial private and government-sponsored exchanges, progress in some technical and scientific areas including relaxation of US export licensing restrictions, and recent air agreement which we look forward to signing and believe will help augment commerce and traffic between our countries.

5. Hajek said he did not want to dwell on obstacles to better relations arising from world situation, of which Viet-Nam major example; he merely noted Czechs definitely opposed to US activity in Viet-Nam “which we consider aggressive” and hope for peace settlement. He wanted to discuss outstanding bilateral issues, especially gold/claims question; this topic occupied bulk of ensuing conversation.

6. Hajek began by stating he thought Czechs had sufficiently impressed on my predecessors their attitude on question. He gave his view of history of talks, including 1961 agreed principles and apparent US loss of interest in fulfilling settlement in early 1962. He noted Secretary told David in March that year² that US not interested because of CSSR attitude toward Cuba and similarly alluded to political obstacles in subsequent meetings with Czech FonMin. However, he said, US never raised question over content of proposed settlement until November 1967 when it apparently rejected everything previously agreed upon and proposed starting again at 1955 position without, however, giving reason. He said he did not doubt sincerity of US expression of good will but could not see how it reconcilable with American position on this problem.

7. I agreed that conclusions on principles reached in 1961,³ but said that during next three years Czechs had engaged in haggling over formulation of agreement. In meantime Foreign Claims Commission on basis of evidence had arrived at adjudication of $72 million which was far out of line with $12 million envisaged in 1961 paper. New situation arose with strong understandable reactions from claimants and Congress. We had negotiated 1961 principles sincerely and in good faith but later came up against a political fact of life, namely they could not be implemented under changed conditions. Reviewing major provisions of alternative US proposal,⁴ I said they afforded Czechs significant benefits, especially as regards deferred payments, and should be acceptable for consideration. I emphasized Department seriously interested in breaking out of impasse.

8. Hajek took up question of insufficiency of proposed claims settlement, stating he found it hard to believe this could have been overlooked in 6-year period before 1961 agreement. He alleged it sounded like pretext rather than real reason not to go forward with agreement, and would have hard time explaining it to his government, Czechoslovak National Assembly and public if new negotiations to open on basis of raised claim figure.

9. In any case, he continued, Czechs did not accept linkage of gold return and claims, because former represented giving back “what is ours.” He said for US to link its obligation to return gold under 1946 agreement with something else is perhaps without precedent, in any case not fair way to treat issue. Gold was taken from Czechoslovakia in difficult circumstances brought about by Western Powers (reverting to subject later he alleged US official documents in Foreign Relations series proved US involved in pressure resulting in Munich Agreement), and US has responsibility to liquidate effects of World War II. Instead it is trying through gold to exert pressure on small country. (He alleged US behavior in this instance suggested to him Fulbright book on Arrogance of Power; I rejected this recourse to an unofficial critic as unfair, subjective and out of place in our discussion.)

10. I said we both could agree that history of gold negotiations unfortunate, but that 1967 proposal could not have been surprise, since we had told Czech Embassy two years before we could not go through with principles. Czech right to gold never in question, but US claimants have substantial equal right to satisfactory settlement of their claims and natural linkage exists between two questions in overall settlement of outstanding economic and financial matters. Precedent exists for setoff of assets of negotiating countries in similar negotiations, e.g., US-Yugoslav and US-Bulgaria.

11. I warned Hajek we had been very restrained in voicing our grievance against Czech Government in non-fulfillment of claims. Compulsion to state our case fully would only exacerbate matters and could hopefully be avoided pending rational consideration of a new approach.

12. Hajek observed we both working for our respective governments and conceded I could not force Washington into offering something different in new proposals. However, he said, those working on those proposals should be aware of lack of understanding and bitterness is CSSR over US position up to now. He professed little hope for future talks, alleging Czechs could only look forward to protracted dealing and possible settlement which might be repudiated “as you repudiated 1961 agreement.” Thus, he said, he would be grateful if my optimism were fulfilled but he personally could not share it. In general, he said, Czechs knew big, rich US did not need their trade, and they in turn could live without their gold or MFN (he mentioned MFN issue only once in passing during whole conversation). But it would be better if US claimants got what their government considered adequate in 1961 and Czechs got their gold; then relations could develop more fully.

13. Other points: (A) I asked for a definitive report on Jordan case,⁵ noting I had talked with JDC and they anxious for complete story. Hajek referred question to Trhlik who said case still under investigation but FMA would approach “proper authorities” for another interim report. (B) Hajek asked about reply to CSSR request for extradition of “former General Sejna,” stating US knew about his criminal activity and political background, neither of which should reinforce his request for political asylum. I replied case still under consideration and information supplied by Czechs taken into account.

14. In conclusion I noted that in receiving me the President wished to inform himself regarding Czech developments and that Secretary hopes to meet Hajek at UNGA, urging in the meantime we try to reach practical solutions. Hajek responded to latter point that he hoped talks with Secretary would be different from his predecessor’s when atmosphere pleasant but nothing happened afterward on outstanding issues.⁶

Beam

1. Source: Department of State, Central Files, POL CZECH–US. Confidential; Limdis.
2. For a memorandum of this conversation, see Foreign Relations, 1961–1963, vol. XVI, Document 11.
3. A statement of principles regarding the settlement of claims and other economic problems was signed in Prague by Ambassador Wailes and Foreign Minister David on December 8, 1961. See ibid., Document 12.
4. See Document 52.
5. Charles Jordan, European representative of the American Jewish Joint Distribution Committee, disappeared and was murdered during an August 1967 visit to Prague. His body was recovered on August 20. In 1975, a Czech intelligence agency defector informed a U.S. Senate committee that Jordan had been killed by Palestinian terrorists while under Czech security surveillance. (Senate, Committee on the Judiciary, Subcommittee on Internal Security, Communist Bloc Intelligence Activities in the U.S. Hearings, November 18, 1975 (Washington, 1976), pp. 1–64)
6. In telegram 2238 from Prague, May 29, Beam noted: “It is particularly apparent from my talk with Hajek that Czechs believe they have found an effective anti-US issue in gold question.” He commented: “It probably suits their purpose to use such an issue to uphold their standing in Communist world and to prevent natural pro-American sympathies throughout the country from lending support to ultra-liberal wing in present reform movement.” (Department of State, Central Files, POL CZECH–US)