740.00119 Potsdam/8–245

No. 846
The Secretary of State to the Soviet Foreign Commissar (Molotov)1
top secret

Memorandum for the Soviet Foreign Minister

The Government of the United States, as you are aware, has during the course of the war in Europe conducted a campaign of economic warfare largely directed against German holdings in the neutral countries A large part of this campaign has been the effort to uncover German assets concealed in the names of neutrals, and in the accounts of satellite countries or their nationals. During the past year, efforts have particularly been made to isolate and preserve such assets.

As my Government has informed your Government, it is proposed to request neutral countries to block assets of countries which were formerly German occupied and of their nationals. The long period of German domination of such countries makes it certain that substantial German assets are concealed in such accounts. Moreover, my Government’s long experience with methods of economic warfare [Page 748] and economic controls leads it to believe that only through the census which would accompany such blocking can full disclosure of concealed funds be accomplished. It is also felt, based on experience both at home and abroad, that the line of demarcation between governmental and private assets, which your Government has proposed,2 is not feasible from an administrative viewpoint.

On the other hand, my Government recognizes the validity of the point which has been made by your Government2 that the Governments of the ex-satellite nations, having declared war on Germany, should have sufficient assets at their disposal. My Government therefore proposes to take the following steps:

My Government will request the neutral Governments immediately to block all assets belonging to Bulgaria, Hungary or Rumania, or to their nationals.
At the same time, the neutrals will be requested to institute a census of such assets, with appropriate penalties for failure to make full disclosure.
The neutrals will be requested to make the results of such census available to the Allied Governments.
The results of the census will be made available, when obtained by my Government, to the Allied Control Council [Commission] having jurisdiction in the particular ex-satellite nation.
My Government will stress, in requesting such blocking, that a general license should be granted to approved agents of the ex-satellite countries to operate governmental accounts in the neutral countries for such purposes as may be approved by the relevant Allied Governments. Reports on any transactions undertaken under such general licenses will be required.
In accordance with its usual practice in all matters of economic warfare (such as the administration of the Proclaimed List of Certain Blocked Nationals3) my Government will concert in this matter with the British Government before making representations to the neutral Governments.

It is believed that this procedure will benefit all of the Allied Nations, will help to attain economic security, and will eliminate a dangerous loophole in present controls, while at the same time giving full weight to the expressed desire of your Government (in which my Government concurs) to allow full scope to legitimate operations of the authorized and approved representatives of the ex-satellite countries.

In accordance with what is understood to be the desire of your Government, no request to block governmental assets of Finland will be made to any of the neutral countries.

A copy of this memorandum has been handed to the British Foreign Secretary.

  1. Printed from an unsigned carbon copy. A copy of this memorandum was given to Bevin. See document No. 847.
  2. See document No. 325, printed in vol. i.
  3. See document No. 325, printed in vol. i.
  4. Concerning the Proclaimed List, see Green H. Hackworth, Digest of International Law (Washington, Government Printing Office, 1940–1944), vol. vii, pp. 654–656.