Problem of Compensation for American Property in Czechoslovakia in 1945–1948

Abstract

This article explores one aspect of the US policy in Europe between 1945 and 1948. Following World War II, Washington’s increased influence required new mechanisms and ways of behaviour. US diplomacy needed to combine its traditional course meant to protect American interests with the intention of expanding its influence and support democratic governments in the liberated states. However, the policy was accompanied by several serious problems and contradictions, e.g. the US relations with Czechoslovakia concerning the compensation for the nationalised and requisitioned property of American citizens. Conducted to improve and recover its economy within the socialist reforms course, the measures were perceived in the US as evidence of an increased Communist and Soviet influence. The inability of the Czechoslovak government to pay compensation and prolonged negotiations put American diplomats in front of a choice between the protection of their citizens’ property interests and continuing to support pro-Western forces in Czechoslovakia. The weakness of the Czechoslovak economy and its limited financial resources were not accepted by the Americans as a good enough reason for concessions. Washington took a principled stand declaring the need for adequate and effective compensation as a condition for the development of any other relations. It used financial pressure — blocking loans and credits which Czechoslovakia was desperate for. This led to a deterioration of bilateral relations and influenced the decline of popularity of pro-Western political forces in Czechoslovakia, ending with the Communist takeover in 1948, which made compensation impossible for a few decades to come.