Memorandum of Conversation with Secretary of State Dean Acheson, Thomas J. Watson, Harold Christenson, and Harold C. Vedeler

ec M.Coljaine 0928 DEPARTMENT OF STATE 996 Memorandum of Conversation 278 DATE: September 17, 1952 SUBJECT: Nationalization of IBM Property in Gzechoslovakia. PARTICIPANTS: The Secretary Mr. Thomas J. Watson, President of International Business Machines Company Mr. Harold Christensen, Secretary, IBM World Trade Corporation Mr. Harold c. Vedeler - EE COPIES TO: EUR EE E DS American Embassy, Prague u. s. GOVERNMENT PRINTING OFFICE 16-61120-1 Mr. Watson called in the company of Mr. Christensen to explain that the IBM organization in Czechoslovakia (145 employees) had just been nationalized and to raise the question of recovering IBM property. He said that he felt a responsibility to the shareholders to make this a matter of record in the Department with a view to any appropri- ate action in behalf of the Company. The IBM representatives mentioned that they had been informed about September 1 of the nationalization of the IBM in Czechoslovakia and about August 1 that remittances from it were being stopped. The IBM investment in Czechoslovakia, consisting chiefly of machines sent into Czechoslovakia from Germany and the US since January 1946, amounted to $1,581,000 and in addition the crown equivalent of $1,400,000 in earnings, half of which was transferable in dollars, was blocked. Mr. Watson said that the IBM was prepared to forego the German machines so that the problem was how to get the American machines out of Czecho- slovakia and asked what I thought would happen. After learning that the IBM had a contract with the Czechs whereby after January 1, 1953 the machines might, upon three months notice, be removed from Czechoslovakia, I suggested that in characteristically communist fashion the Czechoslovak authorities would doubtless invent some excuse for evading the contract and attempt to keep the machines. In response