840.51 Frozen Credits/1020

The Rumanian Chargé (Coste) to the Secretary of State

No. 4069/P–3–II–3a

Sir: Pursuant to my note No. 4062 of December 9, 1940,33 concerning the application filed by the Chase National Bank of New York with the Treasury Department for a license to pay the sum of $2,730,000 from the account of the National Bank of Romania with the said Institution, to Maison Pirous, Teheran, Iran, I have the honor to reiterate to your Excellency the following points, which I stressed, on behalf of my Government, during my conversation today with Mr. Ray Atherton, Chief of the European Division:

1. The freezing of Romanian funds by Executive Order No. 8505 of October 10, 1940, has been regarded by the Romanian Government as a departure from the Most-Favored-Nation Clause stipulated in Article I of the Provisional Commercial Agreement concluded between the United States and Romania on August 20, 1930,34 inasmuch as the measure taken in regard to Romanian funds was not general but specific, thus discriminatory.

2. If the license referred to in the aforesaid note were not granted, it would mean that Romania is subjected to a further discriminatory treatment, which is not applied to any of the belligerent countries.

The funds of the belligerent countries in the United States are not frozen.

Thus, the belligerent countries have the possibility of using these funds for buying needed goods from all those countries with which they are able to maintain commercial communications. Turkey and Iran are, without doubt, in the category of those countries with which each one of the belligerents has extensive trade relations.

In addition to the funds deposited in the United States, the belligerents, in virtue of special payment agreements, dispose of direct means of payment for the importation of Turkish and Iranian goods. In contrast, Romania, particularly with regard to Iran, has no means of payment available other than the blocked funds in the United States.

3. The cotton imported by Romania from Turkey and Iran is destined exclusively for internal consumption. Romania has never exported and has no intention of exporting or re-exporting raw cotton, finished or semifinished cotton goods. Because of exceptional conditions prevailing during the current year and in spite of increased needs, due to extended mobilization of its army, Romania has imported only insignificant amounts of raw cotton in comparison with an average annual importation of 17,000 tons for each of the three preceding years.

4. Having in view on one hand that the needs of the domestic market are so urgent that several textile factories in Romania have been forced to slow down production because of lack of cotton, and on the other the fact that the foreign countries supposedly able to obtain for their needs the cotton imported by Romania are in position to import it [Page 791] direct from Iran and Turkey, the suggestion that goods imported by Romania and paid for from accounts frozen in the United States could reach certain foreign countries cannot be substantiated by indications, let alone by facts.

5. The discrimination against Romania, mentioned under point 2, appears evident not only by comparison with the treatment accorded the belligerents, but also with that granted to all the countries bordering on Romania, no matter what attitude these countries have taken with regard to the present war.

I beg your Excellency to be good enough to take the foregoing arguments into account when considering the request for the license mentioned above.

The said arguments (particularly those under Nos. 1, 2, 4 and 5) apply with equal force to the specific requests for which I had the honor to ask your Excellency’s intercession with the Treasury Department in my notes of November 18 and 19, Nos. 3896 and 3819,35 respectively.

Accept [etc.]

Brutus Coste