671.7431/3–145: Telegram

The Acting Secretary of State to the United States Representative in Bulgaria (Barnes)

51. 1. Communication has been received from British Embassy requesting Dept’s views on resumption of Bulgarian foreign trade and stating that Bulgarian officials have “requested ACC to obtain the lifting of governmental bans on exports to Bulgaria of goods of British and American origin.” British Embassy has informed Dept that Foreign Office views are to be conveyed to US representatives by British representatives ACC Bulgaria.

2. Discussions revolving around specific commodity transactions (ReDeptels 6 and 17 of January 5 and 2582) are deemed more likely to enlist ACC support for the desired resumption of Bulgarian foreign trade than an approach on general terms. Please report your recommendations about preferable approach to ACC.

3. However, if you consider it necessary to indicate US approval of the principle, you are authorized to request General Crane to discuss the resumption of trade on general basis with the head of Soviet Economic Section, ACC, after discussion with your British colleague. It is preferred, however, that you defer discussion with Soviets until Dept receives and considers your reply to Deptel 17 and to this and immediately following telegram83 and develops basis for specific transactions.

4. In discussing resumption of Bulgarian foreign trade, the following general points should serve as a guide:

A.
Permission for correspondence, excluding transactional communication, between US and Bulgaria is under discussion here but no definite date for reopening can be given.
B.
It is believed FRB84 would be reluctant to establish accounts for the Bulgarian Central Bank without certification by Dept under Section 25b [25] of the Federal Reserve Act.85 Such certification by Dept would presumably have to await the reestablishment of diplomatic relations between the two countries. US commercial banks may also prefer such certification although this is less certain; however, certification question does not arise for Bulgarian commercial banks. Transactions in accounts in US banks for Bulgarian banks would require appropriate Treasury licenses. Currently no arrangements for a dollar-lev rate are being made though a rate could be set whenever financial conditions permit. Dollar proceeds might be subject to Bulgarian past and present due obligations payable or collectable in US. Possibly some arrangements might be made for holding part of the credits accruing from US or Allied purchases of commodities for Bulgarian purchases abroad.
C.
Concerning the Bulgarian request in paragraph 1 above for lifting bans on exports to Bulgaria, it would be difficult to export high priority goods to Bulgaria. For the present, extension of credits to Bulgaria for the purpose of its importing goods would be unlikely and extremely difficult to arrange.
D.
Dept prefers trade on private basis. However, as far as US participation is concerned, only trade on governmental basis might be feasible at present. This point will be discussed more fully here to determine the most appropriate method.
E.
Greece and Yugoslavia should have prior claim on any available Bulgarian commodities which are stipulated in the Armistice with Bulgaria.
F.
There is no objection in principle to trade between Bulgaria and other countries if transactions with statutory listed or black listed firms are not involved. Imports of goods of enemy origin or interest would be prohibited by requiring certificates of origin and interest.

5. Immediately following telegram refers to commodities and facts pertinent to possible development of trade on specific transaction basis. Similar telegrams sent to Bucharest as Nos. 96 and 97.

Grew
  1. Neither printed.
  2. No. 52, not printed; it requested information on exportable commodities (874.00/1–945).
  3. Federal Reserve Board.
  4. Approved December 23, 1913; 38 Stat. 251, 273.