861.5151/12–1747: Telegram
The Acting Secretary of State to the Embassy in the Soviet Union
u. s. urgent
niact
2037. Urtels Niact 3375 and 3382 Dec 15 and 16 and urtels 3335 and [333]6 Dec 8 and 9.1 Desirability diplomatic corps protest has full concurrence Dept. Suggest you cooperate fullest possible extent in protest re exchange rubles on hand at 10 to 1 rate. If funds deposited for cable fees are in rubles and are to be exchanged any rate less than one for one Dept believes that these funds should be specifically mentioned in protest provided other Embs Moscow have similar deposits. Otherwise mention should be incorporated in separate protest, (see para 3 this tel).
Suggest possibility combined representations re unsatisfactory level new diplomatic rate also be explored with other members diplomatic corps. If such representations acceptable to other Missions Emb authorized to adhere. In any event inform Dept urgently possibility joint action.
Apart from Emb’s participation in possible group protest mentioned para one above, Dept desires you turn in rubles on hand for exchange accompanied by written statement to effect that exchange at 10 to 1 rate is being made under protest and with reservation all US rights to subsequent readjustment. Acknowledgment written protest as well as receipt showing number rubles turned in, and number new rubles issued Emb in exchange should be obtained. Dept feels that it would be preferable not to make independent proposal re conversion Emb held rubles at 1 to 1 as proposed para 2 urtel 3375 pending decision nature any joint diplomatic corps approach to Soviet Gov and outcome joint protest. However, proposal re conversion payments for magazine may be included in your separate protest and if no joint protest materializes you may likewise propose independently 1 to 1 conversion.
As result exchange Emb will receive new rubles for current needs. Dept desires info urgently re exact number rubles turned in, estimated ruble expenditures near future and probable date and amount next ruble receipts from sale magazine Amerika. Meantime Dept initiating transfer dollars your use but such dollars should not be converted or drawn in rubles pending receipt by you of subsequent specific authorization. For your info Dept reluctant convert dollars new diplomatic rate except as last resort until it receives report from you requested para two above.
[Page 639]Emb’s suggestion re blocking Soviet funds (ur 3382) would involve substantial departure from basis on which wartime blocking controls were imposed, i.e. to prevent seizure occupied areas assets in US by enemy and their conservation pending end of war.
Use artificial internal Emb ruble exchange rate (ur 3335) not possible under US Govt accounting regulations. Dept will be prepared consider adjustments in allowances and alien salaries upon receipt price data from Emb.
Suggest that in your discussions with members dip corps you recommend that references be made in joint protest to following precedents as regards holdings diplomatic missions in other countries where currency conversions have been effected since War. Rumania in its conversion established exceptional basis for diplomatic funds in Art 13 Decision No. 20 Council of Ministers published Rum Monitored Oficial No. 186 Aug 15, 1947 which provided that Missions could exchange on one for one basis amt equal to that put at their disposal during preceding month by Rum Govt under agreements with respective states and the amt of old currency obtained by Missions during same month thru exchange foreign currency at central bank. Finland converted in full the currency holdings of legations and employees of foreign representatives when it readjusted its currency about Jan 1, 1946. Bulgaria after representations by the diplomatic corps exchanged in full currency holdings of diplomatic missions in March 1947 when its currency was readjusted. Urgent Deptel has been sent group European posts where recent currency conversions have occurred requesting they inform you direct by Dec 19 any exemption granted funds Diplomatic Missions accredited countries concerned.
Repeated Berlin for Amb. Smith, as Deptel 2480 Dec 17.
- Last three telegrams not printed.↩