The Assistant Secretary of State ( Dearing ) to the Assistant Secretary of the Treasury ( Gilbert )

My Dear Mr. Gilbert: I beg to acknowledge the receipt of your two letters of March 25, 1921, regarding Soviet gold,81 the earlier of which sets forth the position of the Treasury Department with respect to the purchase of such gold, and raises three questions regarding which the opinion of this Department is desired.

In reply I desire to point out that it is my understanding that under the law the Treasury Department must determine for itself whether it will purchase or reject gold which is offered for sale to the United States Mints and Assay Offices. However, it is hoped that the possibility of international complications which might result from the purchase of gold which there is any reason to believe is of Soviet origin, will be given due consideration by the Treasury Department in determining what its practice with respect to the purchase of gold shall be. It would appear that the rulings which the Treasury Department has issued up to this time with regard to the purchase of Soviet gold, if followed in the future, would probably relieve the Government of any difficulties or embarrassment in this matter.

In reply to the three questions raised in the latter part of your earlier letter of March 25th, I beg to inform you that the opinion of this Department is as follows:

The State Department cannot give any assurance that the title to Soviet gold will not be subject to attack, internationally, or otherwise.
The State Department perceives no necessity for the Treasury Department inquiring into the origin of gold which bears the official coinage or mint stamp of a friendly nation. It is not considered that the purchase of gold of this description is fraught with the likelihood of international complications, as the purchase of gold of known Soviet origin would be.
The State Department considers that the observations made in (2) are applicable to gold bearing the official German or Mexican mint stamps.

Paragraph (3) above, will also reply to your letter of March 15, 1921, with regard to Mexican gold.

With reference to the statement made in the Department’s letter of November 8, 1920,82 that it was felt that it would be inadvisable [Page 775] for any branch or agency of the Government to assume the responsibility involved in the possession of gold which on its face indicates Soviet origin, I may say that it is still felt that it would be unfortunate were any department of the Government to assist in any way in the dissipation of the Russian gold reserve by accepting gold known to be of Soviet origin in payment of goods, by purchase, or otherwise.

Although I believe that attempts on the part of this Government to prevent the dissipation of the Russian gold reserve would be futile, I am nevertheless of the opinion that this Government should keep itself technically free from any charge that it had assisted in the dissipation of this gold reserve.

I am interested to note by the postscript appended to your letter under acknowledgment that claims against the Czar’s government will probably be brought in the United States Courts against the Russian gold now in this country.

I am [etc.]

F. M. Dearing