810.51/933b, 933a

The Acting Secretary of State to the Chargé in Bolivia (Goold)43

Sir: Referring further to the project for a convention between the United States and other American Republics to establish an international gold-clearance fund there are transmitted herewith five copies of the draft of the proposed convention in Spanish and five copies in English.

The enclosed draft is drawn up in accordance with the directions for preparing a definitive text communicated to you in the Department’s circular telegram of March 19, 6 p.m.44 Attention should be called to the proviso of the second paragraph of Article four, as it appears for the first time in the enclosed draft. It was suggested by the Treasury Department while the circular telegram of March 19, was under consideration, but agreement as to the form which it should take was not reached in time to have it brought to the attention of the National Councils of the International High Commission at the meetings held on March 24. It is believed that the enclosed draft may be considered final except in so far as modifications may be required to meet the suggestions of the foreign governments.

The Department would be pleased to have you bring copies of the enclosed printed texts to the attention of the Minister of Foreign Affairs of Bolivia, and advise him that this Government would be pleased to be informed as to the views of the Bolivian Government [Page 43] in relation thereto and to enter upon negotiations to sign the convention either at La Paz or Washington if the Government of Bolivia is favorably disposed toward it.

I am [etc.]

William Phillips

Draft of Convention for the Establishment of an International Gold-Clearance Fund

Whereas experience has shown that the payment of debts arising in the course of commercial and financial transactions is often impeded and rendered difficult by reason of circumstances which interfere with and temporarily render impracticable the safe transportation of gold from one country to another, in consequence of which trade is deranged, values are rendered uncertain, and financial loss is incurred, the High Contracting Parties, being desirous to guard against such grave inconveniences, have decided to conclude a convention for that purpose, and to that end have appointed as their respective plenipotentiaries:

  • The President of the United States of America,
  • _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ and
  • The President of the Republic of
  • _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Who, having exhibited to each other their full powers, which were found to be in due form, have agreed upon the following articles:

Article I

With a view to stabilize exchange and facilitate the settlement of balances, the High Contracting Parties agree that all deposits of gold, made in banks designated for the purposes of this Convention within the jurisdiction of either of them for the purpose of paying debts incurred in the jurisdiction of the other, in the course of private commercial and financial transactions, shall be treated by the respective governments as constituting an international fund, to be used for the sole purpose of effecting exchange.

To this end the High Contracting Parties agree never to appropriate any of the moneys included in such fund; and they furthermore engage, each within its own jurisdiction, to guarantee the fund, in any and all circumstances, in war as well as in peace, against seizure by any public authority as well as against impairment by or as a result of any political action or change whatsoever.

[Page 44]

Article II

The High Contracting Parties agree to act as trustees of the fund mentioned in the preceding article, and for this purpose each of them will designate a bank within its own jurisdiction to hold any part of the fund there existing as joint custodian with such person or persons or such institution as the High Contracting Parties may concur in appointing for that purpose; and the High Contracting Parties further agree to invite other countries, with which either of them may have concluded similar conventions, to appoint representatives to take part in such joint custodianship.

Such joint custodians shall hold the moneys so entrusted to them, as part of the fund, subject to the order of the creditors for whom the fund is held.

Article III

The details of the practical operations of the fund shall be regulated and determined by agreement between the designated depositary banks, and in order to simplify and facilitate such operations, the High Contracting Parties agree to take into consideration the reciprocal adoption of a uniform exchange standard, permitting the interchangeability of their gold coins, for which purpose they recommend the adoption of gold coins which shall be either a multiple or a simple fraction of a unit consisting of 0.33437 gramme of gold .900 fine.

Article IV

This convention shall be ratified; and the ratifications shall be exchanged at . . . . . . . within two years, or sooner if possible.

Each High Contracting Party reserves the right to denounce this Convention at any time, it being however stipulated that the Convention shall remain in force for one year after notice of termination shall have been given by either High Contracting Party to the other, and that on the expiration of the term of one year after such notice, the said Convention shall altogether cease and terminate: Provided, that the guarantee of the fund herein given by each of the High Contracting Parties shall continue in full force and effect so long as any part of the fund on deposit within its jurisdiction at the date of the termination of this Convention shall remain unliquidated.

In testimony whereof the respective plenipotentiaries have signed these articles and have thereunto affixed their seals.

Done . . . . . . . in copies, at . . . . . . . this . . . . . . . . day of . . . . . . . 1919.

[seal] . . . . . . .
[seal] . . . . . . .
  1. The same, mutatis mutandis, July 16, to the diplomatic representatives in Cuba, Ecuador, Guatemala, Honduras, Nicaragua, Salvador, Uruguay, and Venezuela; on July 21 to those in Argentina, Chile, and Panama (File No. 810.51/933c); on July 23 to the Minister in Haiti (File No. 810.51/933d); and on Sept. 16 to the Chargé in Peru (File No. 810.51/952a). A similar instruction was sent to the Minister in Paraguay on July 24 (File No. 810.51/928). In a similar instruction to the Minister in Colombia, July 16 (File No. 810.51/933a), the last paragraph reads:

    In view of the attitude of the Colombian authorities toward this convention, as reported in your telegram of April 1, 9 a.m., and your despatch No. 29 of April 3, 1919, it would appear inadvisable to make further representations to the Colombian Government in regard to this matter at the present moment. The copies of the final revision of the text are sent you in order that the Legation may be informed of the general developments in the project, and for use in further negotiations with the Colombian Government in the matter whenever an opportune occasion develops. [Neither of the communications referred to is printed.]

  2. Not printed; it communicated certain alterations of the draft enclosed in the circular of Dec. 14, 1916. See Foreign Relations, 1916, p. 29.