Office of the Historian

351.1143/7: Telegram

The Chargé in France (Murphy) to the Secretary of State

Vichy, July 16, 1940—5 p.m.
[Received July 17—5:10 p.m.]

82. Department’s 44, 10th. The situation in France today is so confused and so fluid with various governmental departments and agencies scattered throughout this area of France and resultant division of responsibilities that it is impossible at the present time to give more than the following tentative outline in this changing situation.

1.
Bank deposits of American residents in unoccupied France and of American concerns with representatives in unoccupied France are subject to no unusual restrictions. As to means of transferring funds from the United States to unoccupied France you are probably better informed than the Embassy. For transfers of funds to the United States to cover commercial debts and other authorized transactions the Office des Changes is still functioning in unoccupied France and it is understood will grant the necessary applications. In fact Government contracts placed in the United States are, in some cases of which the Embassy has learned, being paid before the due date. An effort is being made by at least one American bank to obtain authority from the Bank of France to transfer dollar accounts of their nonresident clients from France to head office in New York, but it seems doubtful that this will be permitted. There are no restrictions on utilization of franc accounts in unoccupied France by nonresidents. Funds may be transferred from one to another in unoccupied France and even to Bordeaux and La Rochelle at present—though the latter two are uncertain. The National City Bank located at Le Puy, Haute-Loire, Morgan at Chatel Guyon, the Guaranty Trust at Vichy, and presumably the Chase Bank at Jurangon are continuing to conduct business on a small scale and to look after their clients’ interests. The question [Page 559] of their return to Paris (the first two have left a small organization there to cash depositors’ checks) is under consideration. The belief appears to prevail that gradually the distinction between unoccupied and occupied territory will become of less and less practical importance.
2.
As to real and personal property in unoccupied France, there are no restrictions other than that of military or Government requisition similar to that to which French properties are subject. Requisitioned property is, in theory at least, subject to reimbursement: Requisition orders may be redeemed locally for payment one-third in cash and two-thirds in treasury bills due one year after the date of requisition. No cases of requisitioned American property have yet been brought to the Embassy’s attention. In occupied France, the German authorities appear in general to have respected American property where the latter bore one of the notices of ownership furnished by the Embassy.
3.
With respect to merchandise on consignment and claims for merchandise delivered there appear to be no general restrictions on payment but either case will be decided presumably on the basis of circumstances involved. As indicated above, remittances of dollars owed in the United States continue to be permitted. Chief obstacles to payment are, of course, (a) the difficulty of locating the individual debtor or even the company concerned, with millions of the population completely out of touch with their normal relationships, and, (b) the difficulty for even the most solvent debtors to obtain funds for remittance in the present confusion and breakdown of normal means of communication.
4.
With respect to inheritance and insurance payments in France there is no moratorium though the question of remittances to the United States therefrom is less clear. Exchange control regulations previously in existence continue to apply and it appears that the tendency will be towards an increased tightening rather than relaxation thereof.
5.
The moratorium on payment of debts, counterfoil deposits, et cetera, existing in Paris since June 25 is due to be lifted tomorrow.
6.
While access to safe deposit boxes in German-occupied territory has hitherto been forbidden it is now being permitted in the presence of some German officials and subject to the requirement that any foreign currency, foreign securities, or gold must be placed in the custody of the Bank of France or of the bank of deposit on the latter’s behalf.

The Embassy will endeavor to report fully and promptly pertinent developments as they occur.

Murphy