File No. 763.72112/7055

The Ambassador in Great Britain ( Page) to the Secretary of State

[Telegram]

8747. From Crosby [for the Secretary of the Treasury]:

No. 84. Sir Adam Block, representing the Blockade Department of the British Government, and M. Hombert, representing the French [Page 966] Government, have agreed upon the draft quoted below, regarding the proposed extension of the financial blockade. Plan which awaits approval British Treasury officials is that this notice be published simultaneously in the official journals of the United States, Brazil, France, Great Britain, and Italy, and a printed copy accompanied by a proper note be handed in the capital of each Allied country to the diplomatic representatives of all neutral countries. We have also suggested that, promptly after publication of the notice in Allied capitals, a notice should be cabled to the capital of each important neutral country with instructions that notices should be printed and mailed to all banks of that country who are supposed to have dealings in foreign exchange, and also to cause publication in news columns of local papers. The plan is to prepare a white list of neutral banks who accept conditions, with the expectation that after the lapse of an appropriate time the banks of the nations joining in the notice will be instructed by the Governments of their respective countries to confine their dealings to such banks. A reasonable time will doubtless be allowed for further banks to come in under the arrangement after being notified by their American correspondent that their names do not appear on the white list of approved banks. The question is raised as to whether you would prefer the banks in South American countries to send notification of acceptance to some agency in New York. We have proceeded on the assumption that for convenience and other particular reasons [you would?] be quite willing that the control of this machinery should be centered in London. The following is the form of notice:

The Governments of the United States, France, Brazil, Great Britain and Italy have decided it may become inexpedient for banking houses in their respective territories to contain [sic] which engages directly or indirectly in—

[1]
The purchase from or sale to any enemy of any of the said five countries of the currency of any of the said five countries or of any country allied to them or of any other neutral country;
[2]
The transfer of money, credit or securities between an enemy of any of the said five countries and any country allied to them or any other neutral country;
(3)
The purchase from, or sale on behalf of, or acceptance as collateral for a loan or credit to an enemy of any of the said five countries, of any bond or certificate issued by the Government of, or by any corporation or company in any of the said five countries or country allied to them; or of any divided warrant or coupon payable in any of the said five countries or country allied to them; or of any note, bill, check or draft payable in any of the said five countries or any country allied to them;
(4)
The collection, discounting or negotiation on behalf of an enemy of any of the said five countries, of any bond, note, bill, check, draft, dividend warrant, or coupon payable in any of the said five countries or country allied to them;
(5)
The transmission of any document, letter, message or advice of any kind by any means whatever between an enemy of any of the said five countries and countries allied to them or any neutral country.

In each and every case “enemy” for this purpose includes not only any enemy Government and any person, firm or company domiciled in the country of an enemy, or in territory occupied by an enemy, but also any person, firm or company wheresoever domiciled with whom the subjects of any of the said five countries are forbidden to have dealings.

The Governments, therefore, of the United States of America, Brazil, France, Great Britain and Italy hold themselves at liberty to direct their respective subjects to discontinue all intercourse direct or indirect with any banking house in a neutral country from which any intimation by (date) to the effect that it will as from that date abstain entirely from participation in any of the above-mentioned transactions. It will be observed that election by a banking house in a neutral country to continue banking relations with the United States of America, Brazil, France, Great Britain and Italy in accordance with this notice, does not involve the termination of banking relations with enemy countries, as a banking house in a neutral country making such election would be free to continue all financial operations direct between such neutral country and enemy countries which are necessary for the financing of trade between that neutral country and enemy countries. A banking house in a neutral country making the election herein offered would simply have to give up such business with or concerning enemy countries as either involved another neutral country, or relates to securities or financial paper of any of the said five countries in order to minimize the trouble and expense which the sending of such intimation to individual banking correspondents in the five countries would entail upon them. Banking houses in neutral countries should intimate telegraphically before (date) direct to the Secretary Bankers Clearing House, Post Office Court, Lombard Street, London, E. C. 3, their desire to continue subject to the above conditions relations with subjects of any of the said five countries.

Such telegraphic intimation, which should be confirmed by letter, should be worded “desire continue relations,” be addressed Cicala, London.

An intimation given by the head office of a banking house in a neutral country will be understood to apply to all its branches which need not therefore send separate telegrams.

By banking houses is meant any person, firm or institution engaged in and—or [sic] foreign exchange business.

It is understood that any banking house in a neutral country giving the suggested intimation will take all reasonable precautions on its own behalf to safeguard it from being involved in the above-mentioned transactions by third parties under the guise of commercial operations, etc.

[Page 968]

The only action asked of you now is your approval or suggestions respecting form of notice and proposed procedure. Crosby.

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