MIAMI UNIVERSITY- THE GRADUATE SCHOOL CERTIFICATE FOR APPROVING THE DISSERTATION We hereby approve the dissertation Of Carson W. Clements Candidate for the Degree: Doctor of Philosophy ___________________________________ Dr. Sheldon Anderson, Director ___________________________________ Dr. David Fahey, Reader ___________________________________ Dr. Robert Thurston, Reader ___________________________________ Dr. John Rothgeb, Graduate School Representative ABSTRACT THE DEVELOPMENT AND FAILURE OF AMERICAN POLICY TOWARD CZECHOSLOVAKIA, 1938-1948 By Carson W. Clements Utilizing Czechoslovakia as a case study, this study traces the development and ultimate failure of United States policy toward Eastern Europe from 1938-1948. How American policymakers viewed this region in terms of U.S. interests is of paramount importance in understanding why Czechoslovakia and other Eastern European countries “fell” under the sphere of influence of the Soviet Union rather than allying themselves with the West. First, through multi-archival sources, this study demonstrates how U.S. policymakers’ inability to recognize the unique position of, and democratic tradition within, Czechoslovakia led to the development and implementation of an inconsistent and essentially flawed policy of non-accommodation during the Truman administration that allowed the Czechoslovak Communist Party to obtain control of the government in 1948. Second, this study shows that Eastern Europe, although economically not as significant to American interests as Western Europe, became an ideological battleground as the United States and Soviet Union tried to expand their respective sphere of influence in Eastern Europe. As a result the United States increasingly pressured the Czechoslovak government to adopt pro-Western policies favorable to the U.S. Third, this study examines American foreign policy toward Czechoslovakia and Eastern Europe in the form of Lend-Lease aid, the United Nations Relief and Rehabilitation Administration (UNRRA) aid, the European Recovery Program (ERP), and American unilateral loan packages. This study concludes that the United States increasingly utilized economic aid as a lever to influence political events in Czechoslovakia and Eastern Europe and demonstrates how this approach was ultimately anti-productive to achieving American objectives. Fourth, by examining political events in Czechoslovakia from 1945-1948 this study reveals the often-flawed understanding of the political dynamics in Czechoslovakia on the part of key American policymakers, such as William Steinhardt, the U.S. ambassador to Czechoslovakia between 1945 and 1948. The underlying focus throughout this study is on the actual policies developed and implemented and why U.S. policymakers chose to pursue an increasingly non-accommodating policy toward the government of Czechoslovakia. THE DEVELOPMENT AND FAILURE OF AMERICAN POLICY TOWARD CZECHOSLOVAKIA, 1938-1948 A DISSERTATION Submitted to the Faculty of Miami University in partial fulfillment of the requirements for the degree of Doctor of Philosophy Department of History by Carson W. Clements Miami University Oxford, Ohio 2004 Dissertation Director: Dr. Sheldon Anderson TABLE OF CONTENTS Table of Contents ……...……………………………………………....…….…ii Acknowledgments…………………………...………………………………...iii Introduction……………………………………………………...……...…..…..1 Chapter 1: Historiography..………..…………...….………………………….8 Chapter 2: From Munich To Liberation: U.S.-Czechoslovak Diplomatic Relations, 1938-1946 ……………..…………………………......37 Chapter 3: The United Nations Relief and Rehabilitation Administration and U.S.-Czechoslovak Economic Relations, 1943-1947.....………..75 Chapter 4: U.S.-Czechoslovak Economic Relations: From Loans and Credits to the Rejection of the Marshall Plan, 1945-1947…….………..125 Chapter 5: Czechoslovak Politics and the Communist Assumption of Power, 1946-1948 ………………...….………………………………...165 Conclusion ……………..………..…………………………………………..201 Bibliography …………...……………..……………………………………...206 ii ACKNOWLEDGMENTS Many individuals assisted in the writing of this dissertation and although it is not possible to list all those who contributed I would like to acknowledge several people in particular. I would like to thank my dissertation committee: my advisor Dr. Sheldon Anderson; the History Department readers: Dr. David Fahey, Dr. Jeffrey Kimball, Dr. Robert Thurston, and Dr. John Rothgeb of the Department of Political Science for all their help and invaluable comments during the drafts of this work. This project would not have been possible without the help and support of Docent Miloš Kouřil, Mgr. Dan Marek, Dr. David Skopfield, and Mr. Kevin McGruder of the Central European Studies Program of the Department of Politics and European Studies at Palácky University in Olomouc, the Czech Republic. I owe special thanks as well to my friends and colleagues at Miami University for their support, assistance, and help during the writing of this project and translations of various Czech and Slovak sources. iii INTRODUCTION As a microcosm of United States policy toward Eastern Europe in the early Cold War period American policy toward Czechoslovakia between 1938 and 1948 is instructive of overall American policy in the region. As this study indicates, U.S. policy toward Czechoslovakia was piecemeal in nature as American policymakers reactively developed an inconsistent and flawed policy of non-accommodation during the Truman administration. Although the U.S had comprehensive policies for economically and politically more important countries, such as Yugoslavia and Poland, the U.S. relied on a more general policy for other countries in the region. The failure to develop a comprehensive policy for each nation of Eastern Europe eventually weakened the U.S. position in countries such as Czechoslovakia. This worked to the detriment of the United States as Eastern European nations became unwilling pawns in the postwar years as the United States and Soviet Union vied for influence in the region and tensions escalated between the two powers. During World War II the United States operated within and continued to apply a relatively static policy towards Eastern Europe, without major revisions. United States policymakers were convinced that free market capitalism and open markets were necessary for U.S. economic growth. Furthermore, American policymakers believed that these were the best way to avoid the economic competition, which the older, closed systems of empires and protective economic policies had created. In particular, the closed command economy of the Soviet Union was seen as a threat to U.S economic interests.1 1 With the signing of the Anglo-American Trade Agreement of 1938 and breaking of the British Imperial Preference trading system, the Soviet Union 1 The result was an ideological battle between the United States and communist or socialist countries, a distinction U.S. policymakers were unable to make, over the structure of the postwar economic system. Clearly communist regimes posed the greatest threat to U.S. interests, but the nationalization programs of various socialist regimes often led to tensions with the U.S. Essentially, American policymakers did not oppose socialist governments as much as communist ones as long as the U.S. was able to establish trade with them.2 For example, the United States extended credits and loans to Great Britain even under the left leaning Labour Party of Clement Attlee after the war. In addition, the U.S. continued trade with and economic aid to France and Italy despite the strength of the communist and leftist parties in both countries after the war. This study traces the development of American globalism and the development of a comprehensive plan for the relief, recovery, and reconstruction of the European economy after the war. From a policy of accommodation and economic internationalism during the Roosevelt administration and the deals made, in conjunction with the war aims of the United States, with Great Britain and the Soviet Union, the stage was set for the postwar showdown over the economic and political future of Eastern Europe. This study argues that the key demarcation in American policy came with the death of President Franklin D. Roosevelt and his replacement by Harry S. and its centralized and closed system constituted the only real economic threat to the United States. As such, American policymakers understood that the Soviet Union was the greatest threat to American attempts to expand U.S. economic influence and markets. 2 For a discussion of the distinction made by American policymakers regarding communist versus socialist governments in Eastern Europe See Sheldon Anderson, A Dollar to Poland is a Dollar to Russia: United States Economic 2 Truman. During the Truman administration internationalist policymakers took a back seat to non-accomodationists and anti-communist policymakers in the State Department who dominated policy by 1947. With the success of the communist and other leftist parties throughout Eastern Europe American policymakers became increasingly convinced that these countries were in the Soviet sphere of influence, a conclusion not without merit. In response to the growing strength of communist and other leftist parties in Eastern Europe U.S. policymakers increasingly turned to economic aid as a political tool to influence political events in nations such as Czechoslovakia. As this study demonstrates, the use of economic aid as a tool is evidenced by the U.S. aid packages under the UNRRA, which ran until