The National Archives, PEA Records
The Director of the Special Areas Branch, Foreign Economic Administration (Stone) to the Chief of the Eastern Hemisphere Division (Merchant)
Dear Livy: Later this year military developments may threaten trade communications between Germany and the Iberian Peninsula or Turkey or other European neutrals. One of the problems which will then arise will be a last minute flight of German capital for safe keeping in neutral territory. Enemy firms, officials and individuals will, no doubt, attempt to transfer legally owned wealth and loot in their various forms such as gold, gems, securities and money, and will be under special pressure to accelerate such exports while it is still physically possible. German assets in neutral territory will no longer be usable for purchases of war supplies and hence will be available for other purposes, possibly for transfer to the Western Hemisphere.
Our Government will no doubt wish to consider taking stronger measures than heretofore to offset this form of enemy activity. It might be decided, for example, to exert pressure on the neutrals to refuse such enemy capital exports or alternatively to catalogue existing caches as part of a joint program in preparation for ultimate post-war settlements.
While it might now be too early to take final action, I believe a useful purpose would be served if informal preliminary discussions on [Page 216] this problem could be inaugurated. I am sure that the Treasury will be actively interested, together with the British Embassy, yourselves and ourselves. I would suggest, therefore, that interested officials of these agencies be called together for preliminary discussions in order to lay the groundwork for definite, prompt and effective action when the occasion arises. Your comments would be appreciated.8
Sincerely yours,
- In an “interim acknowledgment” dated May 23, not printed, Mr. Merchant wrote: “Your suggestion that informal discussions should take place on this problem appears to me to be a very sound one. However, I will write you more fully after I have taken up the matter with the various interested divisions in the Department.” (The National Archives, FEA Records)↩