893.515/7–749
Memorandum of Telephone Conversation, by Mr. William Frohlich of the Division of Financial Affairs
| Participants: | Edward G. Guy, Federal Reserve Bank of New York |
| James C. Corliss,23 Department of State, FN | |
| William Frohlich, Department of State, FN |
The following is the substance of a telephone conversation initiated by Mr. Guy of the Federal Reserve Bank of New York City at about 3:45 pm today. The other participants were Messrs. Corliss and Frohlich in Washington.
The Federal Reserve Bank of New York received a cable on July 6, 1949, from the Central Bank of China in Hong Kong requesting that arrangements be made for the coverage of insurance and immediate shipment, by airlift from New York to the Central Bank of China at Canton, of 100,000 ounces of the Central Bank’s earmarked gold valued at approximately $3,500,000. This gold was purchased by the Federal Reserve Bank for the Central Bank of China in April 1949, and is [Page 795] presently stored in the New York City vault of the Federal Reserve Bank of New York. (Mr. Guy stated that earlier in the day an officer of the Bank had obtained Treasury Department clearance for the proposed transaction and that it would be greatly appreciated if the Department would similarly indicate that it had no objection to such shipment going forward.) Mr. Guy gave his assurance that the Federal Reserve Bank naturally assumes all risk incidental to the use of proper tested cables with its Chinese clients. The Department’s answer to the Federal Reserve Bank by telephone prior to 5:30 pm today, if at all possible, was requested since the Federal Reserve Bank was meanwhile proceeding with its other necessary arrangements incidental to the shipment. Mr. Guy was assured that we would make every effort to contact the interested persons within the Department and if it was at all possible we would give him an answer by 5:30 pm this evening.
Following a discussion of these facts with Mr. Gordon Strong, FN (in the absence of Mr. Doherty24 who is attending an NAC25 meeting), Mr. Strong stated that he perceived no objection to the transaction. Thereafter at Mr. Frohlich’s request he obtained the following clearances by telephone:—(1) Mr. Eddy, Treasury Department, who confirmed Mr. Guy’s statement that the Treasury Department had given its consent to such proposed shipment. (2) Mr. Metzger, (L/E). (3) Mr. Freeman (CA). (4) Mr. Magill, (CA). (5) Mr. Johnson, (CA).
Messrs. Corliss and Frohlich, FN, also discussed with Mr. McDiarmid,26 FN, the subject matter of the telephone conversation with the Federal Reserve Bank and told him of the clearances that were thereafter obtained by telephone. All of the interested divisions in the Department have indicated that they perceived no objection to the Federal Reserve Bank’s proceeding with the shipment. Notification to that effect was given to the Federal Reserve Bank (Mr. Guy) by telephone at 5:15 pm today.