851.5151/991: Telegram

The Secretary of State to the Chargé in Frame (Wilson)

367. For Cochran from Secretary of Treasury. The Secretary of Treasury has requested me to send this message to you. He has not yet completed his consideration of it, however, and therefore states that you are not to act upon it in any way until further instructed.

Your number 908 September 23, I discussed the first question with you by telephone today. In this connection I send you below a confidential draft of a possible statement by the Secretary of the Treasury which you are to hold in strict confidence until I tell you what further to do with it. It is sent to you now to save possible delay later.

Referring to question (2) closing of American stock exchanges would of course not be considered. I would be glad to use good influence to keep speculators in foreign exchange from taking advantage of temporary situation.

In all my previous instructions to you I have emphasized the fact that the issuance of a simultaneous declaration can only take place when mutually acceptable range of rates has been determined. We have nothing as yet definitive regarding dollar sterling exchange range contemplated. Some of the major elements of the possible arrangements for release of gold between the three centers cannot be determined until ranges of rates are settled. There appear to be complexities in this not yet dealt with in any previous instruction to you. This position should be made clear beyond question to the French and the British because I do not wish to find myself deeply committed to a general position without full protection on these points. Text of possible statement follows:

“In connection with the announcements made by him on January 31 and February 1, 1934,31 to the effect that the Treasury would buy gold, and supplementing the announcement on January 31, 1934, referring to the sale of gold for export, the Secretary of the Treasury states that, hereafter, and until, on 24 hours notice, this statement of intention may be revoked or altered, he will also sell gold for immediate export to, or earmark for the account of, the exchange equalization or stabilization funds of those countries whose funds likewise are offering [Page 558] to sell gold to the United States, provided such offerings of gold are at such rates and upon such terms and conditions as the Secretary may deem most advantageous to the public interest. The Secretary announces herewith, and will hereafter announce daily, the names of [the] foreign countries complying with the foregoing conditions. All such sales of gold will be made through the Federal Reserve Bank of New York, as fiscal agent of the United States, upon the following terms and conditions which the Secretary of the Treasury deems most advantageous to the public interest:

Sales of gold will be made at $35.00 per fine ounce, plus ¼ per cent handling charge, and sales and earmarking will be governed by the Regulations issued under the Gold Reserve Act of 1934.”

  • [Morgenthau]
  • Hull
  1. Treasury Department, Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1934 (Washington, Government Printing Office, 1935), p. 201.