Foreign Relations of the United States, 1948, Western Europe, Volume III

800.515/2–448: Telegram

The Ambassador in Portugal (Wiley) to the Secretary of State

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Lisbon, February 4, 1948—8 p. m.

87. For Reber. Portuguese press has frontpaged France press release Washington dateline Secretary Treasury Snyder’s statement to Senator Vandenberg¹ as follows:

“Portuguese and Spanish assets in US will stay blocked pending termination of negotiations regarding gold stolen by the Germans.² If these negotiations are unfruitful, these assets will be transferred to Foreign Assets Division” (presumably Alien Property Custodian).

Salazar³ and Foreign Minister⁴ are extremely disturbed over this “unfriendly act” so immediately after signing Azores agreement in which Portugal went all out to meet our requirements.⁵ Foreign Minister stated that if this “very adverse publicity” had appeared in press previously, Azores agreement would not have been signed. He also complained bitterly that we were putting them in same boat with Spain.

France press story does not carry full text of Secretary Snyder’s statement to Vandenberg, as reported in Wireless Bulletin 27 February 2, nevertheless public statement is most unfortunate that if Portugal did not settle gold problem satisfactorily their assets will remain blocked. We have never formally told Portuguese Government that unblocking their assets in US was condition precedent to gold settlement. Letters enclosed with Department’s instruction No. 473 August 21, 1947,⁶ have not to date been presented to Portuguese Government or discussed in view of Azores conversation. I will not present these letters to Portuguese Government since I consider them to be drafted in most ungracious manner.

Secretary Snyder’s public statement coming two days after the signing of Azores agreement and the incensed Portuguese reaction on such a high level has created a serious problem in our relations and has most unhappy significance regarding present and future problems in Azores.

If there ever was a moment when we should be seeking a gesture of appreciation to Portuguese Government, in view of what we have received in the Azores agreement, certainly this is it.

As understood here, we have continued for tactical reasons to block Portuguese assets in US pending satisfactory settlement on gold. I understand there is no statutory requirement that these assets must remain blocked pending such a settlement. If this understanding is correct, I believe it is wise if we are to preserve the position we have gained that we immediately unblock all Portuguese assets in which no German interest is readily to be identified.

Wiley

1. Arthur H. Vandenberg, of Michigan, Chairman, Committee on Foreign Relations, United States Senate.
2. These negotiations related to 43,829 kilograms of gold paid to the Bank of Portugal by Germany during the war. The United States held that this gold had been looted from countries occupied by Germany and, on the basis of the Gold Declaration of February 22, 1944, sought its return to these countries. For text of the Declaration, see Foreign Relations, 1944, vol. ii, pp. 213–214.
3. Antonio de Oliveira Salazar, President of the Portuguese Council of Ministers.
4. José Caeiro da Matta, Portuguese Minister of Foreign Affairs.
5. This agreement signed at Lisbon on February 2, 1948, provided for continuance of transit facilities for American aircraft at Lagens airport. For texts, see United States Treaties and Other International Agreements (UST), vol. 2 (pt. 2), pp. 2266 ff., and for related documentation see Foreign Relations, 1947, vol. iii, pp. 1019 ff.
6. Not printed.