~ :EE:IISch'iffman:vc ----- 1U7 "l7 , fDrafling Offiu 111111 Offiur) I DEPARTMENT OF STATE MemoranJum ol Conversation Approved in S 11/29/65 DATE:~m hs 1!';1:965 TIME: 10:30 A.M. PLACE: Secretary's Off~ce SUBJECT: Call on the Secretary by the Czechoslovak Ambassador, Dr. Karel Duda. United States Czechoslovakia PARTICIPANTS: The Secretary Ambassador, Dr. Karel Duda Irving I. Schiffman, EUR/EE COPIE.s TO: sIs EUR Amembassy Prague S/P H " London DECLASSIF'iED G E " Brusselt.o. 12958, Sec. 3.6 INR/OD L " Bonn NL.I f7-IS7 White House.,.S/AL By ~ , NARA Da~tt?-.ltr;f? CIA SCA r Ambassador Duda called on the Secretary at his own request to inquire regarding the current status of 1) the financial and claims settlement and 2) the question of travel restrictions on Czechoslovak diplomats. The Secretary had promised Minister David to look into these two bilateral problems, Dr. Duda said, and he wished to learn the results of the review. Ambassador Duda said that he did not think he needed to restate the Czechoslovak position on these two questions. The Secretary replied that he was familiar with the Czechoslovak views on these subjects. With regard to the travel restrictions, the Secretary said that it is a complicated matter, requiring areview with other Departments of the Government, and that at this time he could say nothing new on the subject. · -2­ Czechoslovakia (1964) proposed -16% (approx.). The Secretary went on to say that major resistance to the settlement with Czechoslovakia resulted from its being way out of line with other agreements and that we could not move ahead on the present basis. To force the issue on the basis of the present draft agreement in the face of strong opposition would create an impediment to our broader policy objectives and to our intentions in the area of East-West trade. The Secretary suggested that "my colleagues in the Department could review the subject" with the Ambassador to see what were the pos­sibilities in this matter. The Secretary added, after we have had access to the appropriate Congressional Connnittees and ascertained their thinking, we would be in a better position to act. Ambassador Duda said that he would report the Secretary's remarks to Minister David, but that at this time he wished to make two points: 1. Negotiations for the agreement had extended over a period of about ten years and there were few people around who were directly involved. He was one of those few. In the course of the long nego• tiations, when the lump_sum claims settlement for nationalized pro­perty was under discussion, the amount was never presented as a problem by the American side and there was no indication of dis­satisfaction with the settlement, the basic provisions of which were agreed upon in 1958. We acted in good faith, Dr. Duda said, that we were in agreement with the American Government on the terms of the settlement and that the American Ambassador in Prague had full powers to negotiate. The Secretary interjected that the agreement was a tentative draft, which Dr. Duda acknowledged. 2. The second point Dr. Duda wished to make was related to the gold question as a part of the agreement. Under the prevailing cir-. cumstances, Ambassador Duda said, we agreed to make the gold question part of the package, although it was not strictly a bilateral matter. He added that the Nazi-looted gold was to be returned to Czechoslovakia under the Paris agreement. A:l.though Czechoslovakia has been able to live without the gold for twenty years and could do so for another twenty years,.they regard the blocking of the recovery of the gold by the United States as a very eensitive political question, tranacending its economic importance, bacauae of tie close coanection of ~sold problem with the Muni. a~tand t1-Qll.• -3­ The Secretary replied that he was familiar with the Czechoslovak pos· ·on in this regard, that he did not wish to enter into a legal dis sion of the matter, but that there were obligations of varying kind~ on both sides which have a bearing on each other. The Secretary adde that the stakes in our relations are greater in the field of bi­laterAl trade, which should be developed on a positive basis and in the roader context of East-West trade relations. The Secretary said that we w d like to see the question of the financial and claims settle­ment out of the way and suggested that Ambassador Duda may wish to discUS's the matter further with Mr. Leddy, to which the Ambassador .