The Secretary of State to the Embassy in Portugal
388. Urtel 413, July 14.1 The Dept has for considerable period of time given thought to question of blocked Port assets in US and has [Page 1000] discussed matter with Portuguese Ambassador here, with Treas, and with Alien Property Custodian. Emb will recall that Dept took strenuous steps to give Port assurances with respect to Snyder Plan that transactions now permitted would not be prohibited shld Port assets still be blocked at time of changeover of jurisdiction. Moreover, Emb shld realize that US has direct interest in Ger assets Portugal, which interest unrealizable as matter stands at present without settlement gold question; and that US as co-issuer of gold declaration has direct moral interest in restitution of looted gold as well as direct interest in gold position of looted countries in as much as most of them are ERP recipients.
Dept desires unblocking Port assets in US as strongly as does Emb, but considers that our relations with countries other than Port must be given consideration in the timing of such unblocking. It is the desire of the Dept to avoid any suggestion that Portugal’s intransigence in regard to looted gold has earned her the premium of unblocking. Since some such implication must inevitably adhere to the act of unblocking, it is the hope of the Dept that proper timing can mitigate the strength of the inference.
It is felt that a relatively appropriate moment would be the signing of the bilateral ECA agreement. If signing cannot be expected before Sept 1 Dept prepared announce deblocking forthwith. Necessary arrangements being made with Treasury.
Foregoing is of course for Emb info only.
Dept views follow separate cable re your Despatch 265, July 162 and re Brit Fonoff’s suggestion attempt dissociate External Assets Accord from gold settlement.