883.5151/41: Telegram
The Minister in Egypt ( Kirk ) to the Secretary of State
[Received September 12—6 a.m.]
1318. My 1311, September 9, 11 a.m. Although the proclamation under reference has aroused considerable speculation in Cairo particularly among business circles as to the ultimate aim of the Government in endeavoring to ascertain the extent of dollar holdings here and abroad it is being generally interpreted in commercial and banking circles as the first step toward obliging at least Egyptian and British nationals if not all holders resident in Egypt to exchange their United States securities for Egyptian or British securities. Several prominent American businessmen have interpreted the proclamation in this light and have expressed the view that if such a drastic measure were applied to them they would prefer to liquidate their affairs here rather than comply therewith.
Since the proclamation has been instigated by London and is presumably in line with general British policy for safeguarding British exchange control concerning the nature of which this Legation possesses information of only a general nature but in respect of which the Department is doubtless fully informed and may have had the occasion to form a policy, the Legation feels that it should refrain from taking a definite position in the matter unless so instructed by the Department. Any directives therefor which the Department may care to furnish in the premises would be appreciated.