467.00 R 29/57

The Secretary of State to the Chairman of the Senate Committee on Foreign Relations ( Borah )

My Dear Senator Borah: I beg to acknowledge the receipt of your letter of February 5, 1925, transmitting a copy of Senate Resolution No. 319 introduced by Senator King relative to a deposit of so-called Turkish gold.

It appears from the preamble to this Resolution that the sum of gold mentioned is believed to have been seized by the Turkish Government from Armenians and to have been deposited by that Government [Page 736] in the Reichsbank of Berlin. By the terms of the Resolution, the President would be requested to represent to the Allied Powers that the United States has an interest in the sum in question and a right to be consulted regarding its disposition; that this sum should be set aside in trust for the persons from whom it is said to have been taken or for the lawful representatives of such persons and that if the sum is to be subjected to the payment of claims, it should be applied in part toward the satisfaction of a claim of the Government of the United States, in the amount of $13,000,000, for the value of wheat and flour advanced to the Armenian Republic by the United States Grain Corporation in 1919 and 1920.

In compliance with your suggestion, I submit the following observations as of possible assistance to your Committee in its consideration of the resolution introduced by Senator King:

1. According to the Department’s information, the sum of gold in question was the subject of two agreements concluded between the German Government and the Turkish Government in 1915. Under the first agreement, which was dated April 20, 1915, the German Government granted the Turkish Government an advance in gold amounting to 80,000,000 marks, and under the second agreement, which was dated July 3, 1915, the Turkish Government undertook to deliver the sum to the Council of the Administration of the Ottoman Public Debt, in full ownership, as security for the first issue of Turkish currency notes to the same amount. In the execution of these agreements, the sum in question or a part of it appears to have been actually advanced to the Turkish Government by the German Government and to have been delivered to the Council of the Administration of the Ottoman Public Debt, by which in turn it was deposited at the Reichsbank at Berlin and subsequently transferred to the Bleichröder Bank in the same city. Prior to the signature of the Treaty of Versailles, a part of the sum deposited by the Council of the Administration of the Ottoman Public Debt had been withdrawn by the Council, and on the date of the signature of the Treaty the balance in the Bleichröder Bank was 57,919,687.44 gold marks, the equivalent of somewhat more than 3,000,000 Turkish pounds, gold. This balance was transferred to the Bank of France on February 11, 1921, for the account of the Reparation Commission, and the rights of Turkey with respect to it were renounced in paragraph 3 of Article 58 of the Treaty of Peace signed at Lausanne on July 24, 1923, between Turkey and the Allied Powers. The paragraph mentioned and the succeeding paragraph, which is also of interest in this connection, read as follows:

“Turkey renounces in favour of the other Contracting Parties (except Greece) any right in the sums in gold transferred by Germany and Austria under Article 259 (1) of the Treaty of Peace of [Page 737] the 28th June, 1919, with Germany,2 and under Article 210 (1) of the Treaty of Peace of the 10th September, 1919, with Austria.3

“The Council of the Administration of the Ottoman Public Debt is freed from all liability to make the payments which it was required to make by the Agreement of the 20th June, 1331 (3rd July, 1915) relating to the first issue of Turkish currency notes or by the words inscribed on the back of such notes.”

2. The question of the possible interest of the United States in the sums mentioned in paragraph 3 of Article 58 of the Treaty signed at Lausanne on July 24, 1923 by the Allied Powers and Turkey was carefully considered by the Department at that time and the conclusion was reached that the Government of the United States had no proprietary interest in or claim to the sums in question which it could properly assert. As you are aware, the United States was not a party to the Peace Settlement with Turkey under which all right to the sum in question passed from Turkey. The Department has not, therefore, raised objection to the disposition of this gold by the parties having legal title thereto.4

3. The Department has no information confirmatory of the statement in the preamble to Senator King’s resolution to the effect that the sum in gold there described was seized by the Turkish Government from Armenians. This gold, as already indicated, was advanced to Turkey by Germany and subsequently deposited in Germany by the Council of the Administration of the Ottoman Public Debt. It is not felt therefore that this Government would have any ground for suggesting that this sum should be set aside in trust for the Armenians.

4. With respect to the claim of the United States against Armenia for wheat and flour furnished in 1919, a claim which now amounts to about $15,000,000, it may be stated that the credit in question was extended to the authorities of the Armenian Republic which was set up in 1919 in territory which lay entirely without the territory of the former Ottoman Empire and within the boundaries of Russia. It does not appear to the Department that this Government could properly have asserted a claim against the so-called Turkish gold on account of the advances made by it to the Armenian authorities in 1919.

I am [etc.]

Charles E. Hughes
  1. Malloy, Treaties, 1910–1923, vol. iii, pp. 3329, 3443.
  2. Ibid., pp. 3149, 3226.
  3. The Chargé in France reported in despatch No. 4827, Feb. 5, 1925 (not printed), that, in accordance with instructions from the Department, he had stated at the 272d meeting of the Conference of Ambassadors that the United States raised no objection to the release of the gold in question to the Assessment Commission established to assess reparation claims against Turkey.