740.00112A European War, 1939/6395
The Secretary of State to the Chargé in Bolivia (Dawson)
The Secretary of State refers to the Legation’s despatch no. 1575 of January 15, 194298 and to earlier despatches relating to the ineffectiveness of the Bolivian Government’s administration of the freezing regulations. It is noted that the Legation concludes that purchases of properties from persons on the Proclaimed List would not furnish an adequate solution to the problem of restricting the influence of the present owners without a more effective blocking of the proceeds and that, consequently, it is the Legation’s opinion that the best method of handling the changes in ownership would be for the Bolivian Government to vest title in itself of Axis-owned or controlled properties situated in Bolivia for the duration of the war.
In this connection the attention of the Legation is called to Resolution V99 of the Third Meeting of the Ministers of Foreign Affairs of the American Republics at Rio de Janeiro in which it is recommended that all transactions of whatsoever nature which are inimical to the security of the Western Hemisphere be prevented. The Resolution goes on to indicate possible measures to be taken in cases seriously affecting the national interest. Within the United States, as the Legation has been informed from time to time, action has been taken to freeze entirely the assets of undesirable individuals and to prevent entirely undesirable transactions, requiring individual licenses for all [Page 617] transactions of undesirable persons or firms. In certain cases firms have been granted licenses to do business subject to specific limitations and provided that full reports are filed with the Treasury Department. In other cases of large entities carrying out operations deemed essential or important to the economy or war effort of the United States, reorganizations have been required, and in some cases individuals placed in the firms by the Treasury Department. In one case, as a last resort, the Government of the United States took over the ownership and control of General Aniline and Film Corporation, under an arrangement whereby the question of compensation was postponed until such time as the Secretary of the Treasury deems appropriate, as explained in the Department’s circular telegram of February 17, 1942.1 This action was taken as a last resort because it was thought that this was the only way in which the enterprise could be effectively controlled and because it was thought inadvisable in the national interest to require the company to cease all operations and liquidate its business.