Evening star., 1939-03-15
Czech Dissolution
Seen Forcing U. 5. 10
Scrap Trade Pact
Industries Now in Reich
Would Have to Pay Old
Smoot-HowIey Rates
By the Associated Press.

Smoot-HowIey Rates
By the Associated Press.
A State Department official ex-
pressed the opinion today the United
States would have to scrap its re-
ciprocal trade agreement with
Czecho-Slovakia
This, he said, seemed certain even
II the Czech portion of the collapsed
republic retained independent or
semi-independent status under Ger
man protection.
German absorption of CZecho-
Slovakia, politically or economically,
would mean, he asserted, that Czech
products coming to the United
States would have to pay the old
Smoot- -HaWley tariff rates because
Germany, under existing procedure,
Is not entitled to the trade agree
ment reductions granted other ma
tions.
Cancellation Sought.
Representative jerks, Republican
OF New Hampshire today called on
the State Department to cancel the
trade treaty. Representative jerks
a retired shoe manufacturer. who
opposed the Czech trade agreement
since 1t was first proposed, said dis
solution of Czecho-Slovakia made it
imperative that this Nation cease
trade benefits provided in the treaty,
especially on shoes"
The State Department official said
elimination of the agreement might
have the unusual effect however, of
increasing shipments of shoes from
CzeSho-Slovakia for the following
reasons:
In the agreement with Czech
Slovakia, the tariff duty of 20 per
cent was not reduced but was
bound (kept at the previous rate
with an agreement not to change it,
on cement-soled shoes, which were
the major item of shoe exports.
Quota Set for Imports.
At the same time, an upper max
1mum limit for shoe imports of this
type from all countries was set at
IA per cent of the total domestic
production.
If the trade agreement now falls
through, the upper limit also falls
through unless this government de-
cldes to take special steps to pro-
claim 1t anew, and German-con-
trolled Czecho-S -Slovakia conceivably
could send more cement-soled shoes
to the United States than it could
under the agreement.
Another chief item of Czech eX-
ports to the United States which
would be affected by the abrogation
OF the agreement is glass. Window
glass received duty reduction of
about 80 per cent and tableware
glass was reduced from 60 to so
per cent ad volorem.
Investors Loss Reduced.
Loss to private American investors
Is greatly diminished, one State
Department official pointed out, by
the fact Czechs themselves previous
ly had bought back about 70 per
cent of their bonded indebtedness.
The dollar bonds outstanding by
the Czech government total $l7,448,-
300 and the City of Prague bonds
$5,401 900, making a total of $22,-
$500.
This Is apart from the debt owed
by the Czech government to the
American Government. 1t is es-
timated that only about s8,00O,OOO
Of Czech and Prague bonds are still
held by American investors.
Another direct question posed by
the fall of the postwar republic was
to whom, if anybody, can the United
States look for the S165 62O,27O owed
this Nation by Czecho-Slovakia.
Speculation on Debt Status.
There was speculation whether the
Czecho-Slovak debt would assume
the same status as Austria's That
country's obligations to the Ameri-
can Government and citizens totaled
about $62 100000. The United States
has had no success in getting Adolf
HitlerS government to assume them.
Germany has denied legal obliga-
ton for the Austrian debt, but has
expressed a willingness to negotiate
a settlement, which she said should
take into account the unfavorable
trade balance with America. Dis
cussions still are going on, but pros
poets of an immediate settlement
are considered slight.
A large part of the Czech debt
Is charges for transportating the
Czech Legion home from Vladivostok
after the World War. Payments on
the debt amounted to S2O,134 ,O92
prior to the Hoover moratorium in
1882.
War Believed Unlikely.
officials here regard the Slovak
crisis as fundamentally different
from the Sudetenland troubles last
fall because, in their mind, it does
not seem at all likely to produce a
general European war. Dispatches
from London and Paris indicate
those governments are in no way
disposed to take any action on behalf
OF CzechO-Slovakia.
The future of Czech Minister
Vladimir Hurban will depend on the
extent to which Germany takes over
the affairs of his country. When
Germany absorbed Austria last year
the Austrian minister, Edgar L. G.
Prochnik, notified the State Depart
ment his country no longer existed,
worked for awhile as an attache in
the German Embassy, and last Sep
tember Joined the faculty of the
School of Foreign Service at George
town University. Mr.. Hurban has
not indicated what he might do if his
country vanishes entirely.