740.0011 European War 1939/9075a: Telegram

The Secretary of State to the Minister in Yugoslavia (Lane)

39. Last evening the Secretary of the Treasury47 was considerably disturbed by a request from the National Bank of Yugoslavia to convert its gold here to the value of $22,000,000 into dollar account and immediately transfer approximately one half of the dollars to its account in the Bank of Brazil.

We can see no reason for such large transfers of funds out of this country, particularly as within the previous few days transfers to Switzerland and Turkey had been requested to an amount approximating some $3,000,000. We asked the Minister of Yugoslavia here to send a message to his Government last night in the following sense:

That we were not contemplating any freezing measure against Yugoslavian funds in general; that, however, Treasury was disturbed about this request for transfers of large amounts of funds out of the United States. We asked that the orders for these transfers be canceled and would be glad to have any explanation of legitimate financial transactions. We further asked the Minister to add that Yugoslavian interests here are in friendly hands and that we desire to give every consideration to their requirements. (End sense of message)

We wish to support in any way that we can the maintenance of the independence and integrity of Yugoslavia. In the face of an overwhelming of the Government or country by force we would, of course, desire to have the Yugoslav financial assets in this country protected against seizure or control by alien forces which could be accomplished by freezing the funds now here. Further until the situation is clarified, we would not wish these funds to get out of reach of our control. We would therefore want you to keep us closely informed of your opinion of the developing situation.

The gold conversion above referred to will not, because of technical impediments, come before the Treasury for action before Monday morning. If the report we receive from Fotitch is not satisfactory, however, we feel that in order to protect Yugoslav interests it may be necessary to consider a freezing order.

  1. Henry Morgenthau, Jr.