800.515/2–548: Telegram

The Secretary of State to the Embassy in Portugal


68. Reur niact 87, Feb. 4. In response to specific Congressional inquiries concerning US policy regarding foreign held assets in connection with ERP Snyder transmitted letter to Vandenberg reading in part as follows:

“Spanish and Portuguese assets are still blocked pending the completion of the current negotiations with Spain and Portugal covering looted gold and German assets. If these negotiations are successfully completed before the public deadline date, arrangements can promptly be made for the unblocking of these assets; on the other hand, if the negotiations are not completed by that date, these assets would likewise be covered in the transfer to the Office of Alien Property and would remain blocked pending the conclusion of the negotiations.”

Above was only reference to Spain or Portugal in eight page letter explaining US Govt policy as determined by NAC action re remaining [Page 997] blocked assets of all countries with approval of executive departments concerned. Full text of letter1 follows via pouch.

Emb attention directed to significant differences in letter as compared with quote from French press release as follows:

Spain and Portugal are not singled out in Snyder’s letter since many other European countries are also mentioned. Some linkage of Spain and Portugal—which has no political significance whatsoever—inevitable since lack of settlement on looted gold and German assets places them in identical positions as only two blocked neutrals for whose assets no unblocking procedure has been established.
Should be made clear to Portuguese that transfer Portuguese assets to OAP is purely administrative move in US Govt connected with termination Foreign Funds Control without implication that vesting will follow. On basis your recent reports we strongly hope negotiations can be satisfactorily completed and funds unblocked well before transfer date about June 1.

Continued blocking pending conclusion negotiations on looted gold and German assets has been applied to all neutral countries and thus no discrimination against Portugal. Emb has previously been authorized bring this to attention of Port Govt and even without formal notification Dept assumes Port Govt aware this policy which has been made known publicly heretofore as in case of Switzerland and Sweden.2 Emb advised in Deptel 47 of Jan 261 that Dept did not wish letters enclosed Dept instruction 473 Aug 21 to be presented pending further instructions.

With further reference unblocking, for your strictly confidential info Dept already discussing with Treas and OAP possibility of unblocking Port on basis similar to that proposed by you but after reaching satisfactory gold settlement.

Dept regrets timing of release but Emb will appreciate that executive branch of Govt had to respond to insistent Congressional demand for statement US policy with respect to foreign held assets in relation to ERP.

Emb may, at its discretion, inform Portuguese that letter constituted a statement of existing policy and did not represent in so far as Port is concerned any tightening of this policy or discrimination against Port.

  1. Not printed.
  2. For the texts of the agreements with Sweden and Switzerland on German assets and looted gold and a discussion of the negotiations leading to the agreements, see Department of State Bulletin, June 30, 1946, p. 1101, and July 27, 1947, p. 155.
  3. Not printed.