Foreign Relations of the United States: Diplomatic Papers, 1944, General: Economic and Social Matters, Volume II

740.00112A E.W./9–2144: Circular telegram

The Secretary of State to Diplomatic Representatives in Certain European and Near Eastern Countries ⁸⁴

Washington, September 21, 1944—4 p.m.

The United States and British Governments will issue simultaneous statements on September 26 to the following effect:

“It has been determined by the United States Government and the British Government that the continuation of the Proclaimed and Statutory Lists will be necessary following the cessation of organized resistance in Germany.⁸⁵ This action is required in order to permit the Allied Governments to deal properly with firms which have been part and parcel of the Axis effort to gain world domination. Many of these firms have been controlled from Axis territory and have been utilized as instruments of the Axis war machine. Control over these Axis subsidiaries will be necessary as a supplement to Allied control of the head offices of these firms in Germany until adequate measures are taken to prevent the further utilization of these firms as instruments of Axis policy. It will also be necessary to continue on the lists those firms that have sold themselves out to the Axis through their desire to make temporary exorbitant profits at the expense of the cause of democracy. The continuation of the lists is also necessary in order to maintain controls over foreign assets, which have been looted from their rightful owners by the Axis Governments, until steps are taken to deprive the Axis of this stolen property. Other firms on the lists constitute foreign investments by Axis leaders in an effort to finance themselves and their cause following the surrender of Germany. The lists will also constitute a means of furthering the war-time economic strangulation of Japan.

“While the lists will be maintained during the transition period from war to peacetime conditions wherever the remnants of Axis activity require, it is contemplated that the complete or virtual withdrawal of the lists will be possible at an early date with respect to those countries where adequate controls have been established and Axis spearhead firms have been eliminated.

“The United States Government expresses its hope that all governments and persons in support of the cause of democracy will cooperate to the end that these stated objectives shall be accomplished.”

You are requested to inform immediately the government to which you are accredited of the proposed statement.

In view of a possible early end of hostilities in Europe and since it is desirable to accomplish the deletion program gradually through deletion of a number of names in successive supplements beginning with those firms which have contributed least to the Axis cause, you are requested to begin immediately a review of the Proclaimed List in the light of the above-mentioned post-resistance aims and to forward a report to the Department indicating (a) those names which should remain on the list during the post-hostilities period for which the lists will be maintained (including Axis spearhead firms, concerns which are enemy controlled, holders of property belonging to enemy nationals, receivers of property looted by enemy nationals, and in general any others likely to engage in activities detrimental to the above-mentioned post-resistance policies) and (b) the order in which the remaining names should be deleted, i.e., arranging the remaining names in the order of the seriousness of their offenses placing first those firms which have contributed least to the Axis cause.

Hull

84. Sent to the diplomatic representatives in Iran, Iraq, Ireland, Liechtenstein, Portugal, Spain, Sweden, Switzerland, and Turkey. Circular telegram dated September 20, 5 p.m., transmitted the same information to diplomatic representatives in the American Republics except Argentina (740.00112A/9–2044).

85. Basis for the decision to continue the Proclaimed List was a report, not printed, entitled “Continuation of the Proclaimed List in Post-Hostilities Period”, approved on August 28, 1944, by the Interdepartmental Committee on Post-Hostilities Controls over Foreign Property, and on September 1, 1944, by the Executive Committee on Economic Foreign Policy. With regard to “Western Hemisphere Problems”, the report stated: “A strong argument can be made that all of the Latin American countries, other than Argentina, have to a substantial extent implemented the resolutions of the Rio de Janeiro (January 1942) and the Washington (June–July 1942) Conferences, and should therefore be differently classified than other nations. Moreover, all of these countries have broken diplomatic and commercial relations with the Axis, and are unlikely to be refuges for Axis funds. Some of them are at war, and one, Brazil, has an army in the field. These considerations will make it desirable: (a) to continue with present policies of reducing the lists substantially, or even eliminating them entirely, where local controls are satisfactory; (b) to reduce the lists greatly in all Latin American countries (except Argentina) immediately upon surrender of Germany; and (c) to eliminate even the vestigial lists in these countries as quickly as may be possible, consistent with such overall policies toward disposition of vested or supervised assets as may be determined.” (740.00112A EW/9–144)

    For additional documentation on the Western Hemisphere phase of the Proclaimed List, see entries under “Proclaimed List” in index for vol. vii.