462.00 R 294/352a: Telegram
The Acting Secretary of State to the Ambassador in France (Herrick)
225. For Logan: L–100. Your L–188.56
1. Department had understood from paragraph 7th your L–161, May 13, and from your draft reply in paragraph 6 that money was being set aside in dollars.
2. Department is not aware of any means whereby there could properly be credited against American army cost claim amounts in [Page 147] excess of the sums actually received in dollars or their equivalent. It appears that question of amounts to be debited to Belgium does not directly concern the United States. Nevertheless, if certain sums are actually set aside for conditional payment to the United States this Government is interested as are Allied Governments in maintaining their dollar value intact, and to this end it is desirable that sums in paper currencies should forthwith be converted to avoid possible loss by depreciation. It is noted, however, that foreign treasuries are understood to wish to avoid immediate conversion because of possible effect on exchange. As a practical means of effecting conversion, Federal Reserve Bank of New York would be prepared to accept blocked account to its credit in local currencies with state banks of various countries, with right to convert to dollars when deemed advisable by it protecting exchange so far as possible. Amount involved should not create much difficulty in exchange, and our interest would be to convert without undue loss. Belgium presumably could be credited with sums set aside at their value when received by Belgium, and when sums ultimately received by our Treasury American Army cost account will be credited with dollar value of currencies at time credited to Federal Reserve Bank. If right to convert to dollars at option Federal Reserve Bank not accorded, credit on American Army cost account can only be given at value of foreign currencies in dollars when received by our Treasury.
If sums credited to Federal Reserve Bank, it should be authorized to invest funds abroad pending conversion, or here after conversion, at risk of United States, awaiting final disposition and interest earned to follow funds.
3. Please repeat figures your first paragraph since figures as received are equivalent at present exchange to about 51,500,000 gold marks, not 31,750,000.
- Supra.↩