The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Fom F. K. 131
BOARD OF GOVERNORS
or THE
FEDERAL RESERVE SYSTEM
spondence
Office Correspondence
Chairman Eccles
Date
Bate.
septet er ?o,
{j
« Dreibe^bis
CONFIDENTIAL
The attached copy of a memorandum prepared
by Mr. Brome of the Legal Department of the New York
Bank summarizes in convenient form the status as of
September 2J# I9I4.O of the foreign accounts in "which
special authority is or has been in effect•
Attachment
c
0
p
y
Revised to
September 23,
FOREIGN ACCOUNTS
TNITH RESPECT TO WHICH SPECIAL AUTHORITIES
ARE NOW, OR RECENTLY HAVE BEEN, IN EFFECT,
Copies toj
Mr. Sproul
Mr. Logan
Mr* Knoke
Mr. Dreibelbis
Mr. Koppang
Mr. Tiebout
Mr. Cameron
Mr. Brome
Legal Department
Special Files
BANQUE NATIONALE DE BELGIQUE
Dollar Accounts
"Account A"
(ordinary account)
9/23A0
Balance
$696,586.38
"Account No# 2"
(opened as stabilization, used as
check account since
September 26, 1939)
9/23A0
Balance
| 33,123,94
"Account No. 3"
(opened by transfer from "A", no
indication as to
function) 9/2$/hfi
Balance
1203,101*1
Gold Accounts
"Account A"
(Bank's gold)
9/2^4.0
Balance
1166,770*123*56
"Account No* 2"
(stabilization
gold) 9/23Ao
Balance
-0-
No special authorities recognized
by us. Ambassador Extraordinary Theunis
was given authority to draw up to
|l,500,000. After several payments
balance was transferred to his account
at Chase* On June 29 the State Department sent us a copy of a power of attorney
signed by Governor Jans sen to Baudewyns,
and, as alternate, Ansioux, effective
"in the event that the administration
• . • should find it impossible to give
instructions" and to Theunis in the event
the above mentioned could not act.
The Belgian Ambassador, through the
State Department, sent us a copy of a
decree law of February 2, I9I4.O, permitting
corporations to move their head offices
(siege social) outside Belgium, and suspending the power of officers, etc.,
within occupied territory* The Ambassador
certified that the bank had moved to
Paris pursuant to such decree, and later
Janssen sent us a copy of an "amending
declaration" changing the siege social to
the seat of the Belgian Government, and
suspending the powers of officers, etc*,
in occupied territory*
On June 6 the State Department
recognized the Belgian Government in Paris
and that the powers of the King had devolved upon such government* Under date
of June 26 the Belgian Ambassador stated
That the Belgian bank had moved, with
the Bank of France, from Paris to Saumur
to Mont de Marsan whereas the Belgian
Government had gone to Ostend then
Poitiers and finally Bordeaux, but that
it was quite legal for the administration
of the bank to be conducted from some
place other than its siege social.
On June 15 Janssen from Poitiers
advised that the bank had moved there
with the Bank of France and would transmit its cables through official Belgian
channels as government cables. This
was never done. On June 17 we were
advised that the bank was in Mont de
Mars an, and on June 20 that Theunis
would confirm certain cables. On July 1
and 2 the Belgian bank moved to Tarbes,
Hautes Pyrenees, with the Bank of France,
cabling us (directly and also via
American Consul) to pay f321#918«18
to Guaranty for Account D Belgian Government to meet July 1 bond payments.
Theunis had already met such payments and
requested changed instructions to pay
Chase $351#398 favor Theunis, which instructions came from Vichy direct only
by cables dated July 9 and 13* Thereafter our and Theunis1s cables were
unanswered* Payment was made to Chase
on August 31 after we received a letter
from Belgian Ambassador confirming the
validity of the payment, the governments property interest, etc*, and that
on July 9 and 13 the Belgian Government
and ^elgian bank were legally situated
in Vichy. The State Department referred
to its June 6 letter and stated that it
recognized the continuity of the Belgian
Government. (By letter dated September 23
Mr. Theunis advised us that he had just received a cable dated July 8, 19^0, from the
Belgian bank setting forth the contents of
a cable which it proposed to send to us,
being the cable (No# 222) dated July 9 referred to above.)
On September 7, I9I4O, we received
a letter from the B. I. S. transmitting
copies of a letter to them from Janssen
and its enclosure, which they had received
from the Reichsbank. The enclosure was
a copy of the Moniteur Beige for July 19,
I9I4.O, containing a notice that on July
15, I9I4O, the Board of Directors of the
Beljjian bank,meeting in Brussels, had
"attested" to the cancellation of its
May 15, 19^4-0, decision to change the
siege social. On September 21, 1940* we
received a letter from the Reichsbank transmitting a letter to us from Janssen together
with another copy of the same pages of the
Moniteur Beige. Janssen1s letter was
similar to his letter to the B. I. S.
Mr. Theunis has indicated that an attempt will be made to provide a means of
meeting Belgian bond payments from these
accounts. At the present, however, the
Legal Department has advised that no instructions can be honored»
-2-
BANK OF CANADA
(Entire balance of dollar account (onlyaccount maintained) transferred to account
designated "The Government of Canada-Account A" on August 31, 19kO, see below.)
CANADIAN GOVERNMENT
Dollar Accounts
"The Government of Canada - Account A"
$225,666,650.05 from Bank of
Canada account
9/23/J4O Balance
$225,796,322.66
"The Government of Canada - Account B"
9/23/l|D Balance
$
-0Gold Account
"The Government of Canada - Gold
Account"
9/23/ijD Balance
|
-0-
In accordance with instructions from the Bank of Canada
received direct and from the
Government of Canada received
through our State and Treasury
Departments, at the close of
business on August Jl, 191+0, we,
as fiscal agent £>r the United
States pursuant to request of the
Secretary of the Treasury,
opened two dollar accounts in
the name of the Canadian Government, and, as principal pursuant
to authority of the Federal Reserve Act, opened a gold account
in the name of the Canadian
Government.
Authorities^ Bank of
Canada authorized to operate
dollar account "A" and gold
account, and six officials of
Canadian Government authorized
to operate dollar account "B"»
-3-
BANK OJ?
ILNQLAND
(Gold and dollars in all accounts transferred to corresponding accounts in names
of His Britannic Majesty*s Government on
July 12, 1940, see below.)
BRITISH GOVERNMENT
Dollar Accounts
In accordance with instructions
from the Bank of England received
direct and from the British Government received through our Secretaries
of State and the Treasury, at the
close of business on July 12, 1940,
we transferred the balances in all
Bank of England accounts to accounts
in the name of the British Government
as indicated in first column* The
dollar accounts were opened and maintained by us as fiscal agent of the
United States pursuant to Treasury
request. The gold is held by us as
principal under authority of sections
4 and 14(a) of the Federal Reserve Act,
n
Eis Britannic Majestyfs Government Current Account F n
|2,909,762,#12 ftom Bank of Ingland Account F.
9/23/40 Balance
$2,683,978*60
n
H. B. M* G* Current Account G n
#27,760,902.55 from Bank of England Account G-*
9/23/40 Balance
$58,767,908*56
"H* B. M. G* Special Account A w
#21f146,171*98 from Bank of Ingland Account A.
9/23/40 Balance
I
916,928*99
Gold Account
Present authorities: Bank of
England authorized to act as to all
accounts* Special authorities to
Purvis, et al*, re Special Account A
remain in force.
"H. B. M. G. No* 3 Account11
All gold said to contain
3,824,927•632 fine ounces
in Bank of England No* 3
account*
9/23/40 Balance
154.288,992*56
Emergency authorities; Upon receipt by us of a notification from
the British Ambassador in the form
which has been arranged, the authority of Bank of England ceases, Purvis,
et al. retaining authority re Special
Account A, and in lieu of the Bank of
England to British Ambassador and
J. A. C. Osborne would have authority
to operate all accounts other than
Special Account A*
-4-
BANQUE DE FRANCE
Dollar Accounts
No designation (ordinary)
9/23/40 Balance $ 3.184,100.19
"Account M w
9/23/40 Balance |
3,679*00
M
Account S"
9/23/40 Balance f
5,597,18
"Account T"
9/23/40 Balance #253.700.588.61
"Special Account"
9/23/40 Balance I 15.565.547,71
Gold Accounts
No designation (ordinary)
9/23/40 Balance 1484.597.641.81
"Account S"
-09/23/40 Balance
" Ac count P"
9/23/40 Balance f
-0-
"Account Z"
9/23/40 Balance $ 17.686.574+52
Meanwhile on September 14, 1940,
we received an unnumbered and untested cable, dated September 13,
1940, signed "Bank of France" to the
effect that "M. Yves Breart de
Boisanger has been appointed Governor
of the Bank of France". On September 17, 1940, we cabled (No. 172}
requesting them to repeat such cable
with proper test and number, which
they did by their cable No. 124
dated September 20. The Legal Department has under advisement the
question of what formal authentication
of this change and what statement regarding the recognition of
the Yichy government by our government, if any, should be obtained.
In the meantime the accounts are
being operated on the existing cable
test arrangement.
Security Accounts
No designation (ordinary)
9/23/40 Balance #
By cable No. 15 dated
Bordeaux June 25, 1940, signed
"P. Fournier, Banque de France"
we were notified that the authority
of Martial and de Sieyes to draw on
all accounts was cancelled, and
that they "remain accredited only
to operate the special account *****
Mr* Martial had been authorized by
letter dated March 7, 1940 to draw
on "Account T" "for his and his
collaborators* personal expenses".
Under date of September 13, 1940
Martial requested us to pay the
Chase National Bank $3,000 by debit
to Account T for credit to his account for "personal and office exr
penses". In view of Bank of France
cable No. 15 we cabled (No. 169)
that bank on September 14 to confirm its letter to us of March 7
authorizing us to place at the disposal of Martial to the debit of its
Account T any amount which he may
request for his personal expenses
and also to advise us whether it was
intended that such authorization
should include Martial1s office expenses. Not having received a reply, on September 20 we cabled
(No. 181) "Have you replied our No*
169". We have as yet received no
reply to these cables.
-0-
-5-
DE NEDERIANDSCHE BfiHE
Ac c o u n t s
No Designation
9/85/40 Balance
ft
285.
^Account I11
(Balance transferred
to Government)
G-ald Accounts
w
Special Gold Account B11
9/25/40 Balance
&
"Special Gold Account IB*
9/25/40 Balance
8
Regular authorities not in
effect because of ^Zenyt* cable*
Decree of May 24, 1940 purports
to place accounts of Dutch banks
domiciled in Holland at disposal
of Groverrwent, and Government lias
given power of attorney to Minis*
ter* - Exchange of notes between
Netherlands Minister and State
Department set forth in State
Department letter June 27 1 1940, State Department says i t recognises
authority of Minister to operate
accounts and other assets of
Royal Netherlands Government* See
our circular No* 2091> 7/2/40*
''Special Gold Account Aw
9/25/40 Balance ft
^Special Gold Account F11
(Transferred t o Government)
BQXAL M'fffc'H.yffIAHDS
Dollar Account
"Royal Netherlands Government
Dollar Account" Transferred balance of bank1s "F" account*
9/25/40 Balance^
"Royal Netherlands Government
Gold Account11 Transferred gold
in and received for bank*s n7n
account
9/25/40 Balance
&2y884 .084-47
By letter dated January 18,
1939, de Nederlandsche Bank advised us that its dollar and gold
account lfFfl were government property
and by cable dated Hay 13, 1940, that
the right to dispose of the *Vn accounts had been transferred to the
government, which would probably
act through the Bank of England •
By cable dated May 24 the Bank of
England transmitted a message from
the Butch government to the effect
that de Geer and van Asch van Wijck
have been authorized to operate all
government accounts in the TT» S+
and requesting transfer of F accounts
to name of government • This was
confirmed by letter dated May 24
signed ^van Asch van Wijek* transmitting specimen signatures» The
accounts were transferred on May 24,
the dollar account being held in
liquidation only* On June 7 the
Treasury authorized us to open
these accounts as fiscal agent*
At the time the State Departmentf s letter of June 27, 1940,
relative to the decree of May 24
was obtained we sought to obtain
official confirmation of the foregoing, but it was sidetracked*
By letter dated August 30, the
Treasury recognized that the gold
account is held by us as principal
under the Fed* Reserve Act* Under
date of Sept. 10 we sent the
Treasury the specimen signatures
of de Geer and van Asch van Wijck
for authentication by the Dutch
Minister. Drafts of letters for
the Minister and State Department
have been delivered for their
respective considerations*
At various times de Geer and
van Asch van Wijck have authorized
the Dutch Minister to draw on the
dollar account as follows:
(a) up to #145,000 monthly,
total not to exceed #6,960,000,
(b) up to #6,400,800 in
favor of Guaranty Trust Co* until
Dec* 31, 1943L,
(c) up to #4,200,000 until
Dec* 31, 1941, and
(d) up to #288,996*
NORGES BANK
In name of Norges Bank
Dollar Account
No designation
9/23/40 Balance #14,962,406*71
Gold Account
No designation
9/23/40 Balance #17,119,082*63*
Security Accounts
"Ordinary Depot"
9/23/40 Balance #15,110,000*00
"Separate Depot*
9/23/40 Balance #1,509,000*00
No designation
9/23/40 Balance #82,000*00
Gold accounts in name of
Royal Norwegian Government
"Account No* 1*
9/23/40 Balance #5,247,999*46
"Account No* 2"
9/23/40 Balance #11,317,614*12
*0f this amount #3,015,284*37 is
held by I* R* B* of San
Francisco as our agent and
for our account*
By letter dated May 6, 1940, the
State Department advised us as follows:
(1) that the American Minister in Stockholm had received from the Speaker of the
Norwegian Storthing an original power of
attorney, signed by the Norwegian Minister
of Foreign Affairs and Finance authorizing
the Norwegian Minister to the U* S. "to
operate all accounts and other assets in
the U» S* belonging to * * * the Bank of
Norway * * * ", (2) that the State Department was satisfied of the genuineness
of such power, (3) that the Norwegian
Minister had advised the Department of
a Norwegian decree of April 22, 1940, of
which the Department took "official
cognizance", article 10 of which provided
that "At motivated request of Royal
Norwegian Government, Norges Bank is to
place means at disposal of Government for
purpose of waging the war and obtaining
supplies to extent considered necessary
and defensible by Government", (4) that
the Norwegian Minister had officially
advised them that the King under such
decree had on April 22 appointed a new
Board of Directors for Norges Bank consisting of Dr. Arnold Raestad, Chairman,
Jens No eve, Ole Colbjoemsen, Dr* Wilhelm
Keilham and Oscar Hansen, and that "Holdings abroad which belong to banks or
private persons in areas occupied by
Germans are taken over by Norges Bank
on behalf of the Royal Norwegian Government * * * ", the Department "took
official cognizance of this notification", and (5) that the Department accepted the authority of the Norwegian
Minister "to operate all accounts and
other assets in the United States belonging to the Norwegian Government, the
*
Norges Bank y
By letter dated May 8, the Norwegian
Minister confirmed (1) the power of the
Minister of Finances to sign the power
of attorney, (2) that Norges Bank is a
governmental institution, (5) that the
power of attorney is valid, (4) that the
-o-
April 22 decree was constitutional, (5)
after quoting article 10, thereof, that
the "formal document incorporating the
decision11 toy which Norges Bank placed its
assets at the disposal of the government
has not been received, but that such a
decision was evidently the basis of the
power of attorney, and that he would get
such document and forward it tj> us f
hoping that "definite action may be taken"
without awaiting the arrival of the
document*
The above letters were mimeograjited
and transmitted to interested banks•
On June 27 the Board sent us a
letter from Norgee Bank dated May 10,
enclosing Signatures of Dr* Arnold Raestad,
Mr* J# Norve and "Principal Cashier"
Mr- John Norman, and a copy of a Norwegian
publication containing a copy of the
decree of April 22* This decree was
translated by the Norwegian Minister*
who, under date of July 5 again confirmed that he alone had authority to
operate the Norges Bank account
More recently we have received a
letter dated June 10 signed by Mr* Erik
Colban, Norwegian Minister in London,
and Mr«. Oivind Lorentsen* Noorwegian
Shipping Directors, informing us that the
Norwegian Minister in Washington is
authorised to operate this account conjointly with Mr* Erik Colban or Mr*
Oivind Lorentzen or Mr* Ole Colbjornsen* —
The Minister is taking steps to have this
letter withdrawn*
BANK POLSKI
On November 17, 1939, tiie Polish
Ambassador confirmed to us by letter
transmitted through the State Department
No designation
that the authority of Messrs. Karpinski
9/23/40 Balance #599,871*74
and Nowak to sign on behalf of Bank
Polski had not been revoked and, under
the laws of Poland, continued to exist
Gold Account
and could be exercised in Paris ^or
elsewhere". On January 22, 1940, he
Ho designation
9/23/40 Balance #2,246,202*39 certified to the same effect including
Messrs• Baranski and Czernichowski. On
December 1, 1939, and thereafter we informed Bank Polski that we would act on
written instructions only. While operSecurities Account
ating from Paris all of the gold and dollar
balances of the Bank Polski were transNo designation
ferred to the Bank of France• On July
9/23/40 Balance |1,100,00
5, 1940, Bank Polski cabled that they
had moved to London, care of Bank of
England* This cable was duly confirmed
by letter and by a letter dated July 12
from the Financial Counselor to the
Polish Embassy in the United States,
By Bank of England cable 675/40 dated
July 6, 1940, Bank Polski stated that
they had #776,318 and 159 gold bars
containing 64,177 fine ounces in Bank of
France account with us and requested us
to communicate with Bank of France re
transfer• By Bank of England cable
702/40 dated July 11, 1940, Bank Polski
informed us that they had left their
telegraph key in France and requested a
new one* By cable No* 50 dated July 23,
1940, Bank of France requested us to hold
#776,318*82 for Bank Polski and
64,177*212 fine ounces of gold* We
effected transfer July 24, 1940, and advised Bank Polski by cable dated July 25,
1940, and letter dated July 29, 1940,
indicating same authorities and restrictions continued in effect*
Dollar Account
-10-
No designation
9/23/40 Balance #52,155,674^25
Designated ftMr* Wollmar Bostrem
and Mr* Harry Eriksson, acting
jointly (property of Sreriges
Riksbank subject to disposal by
Mr* Bostrcan, Minister of Sweden
to the TU S+, and Mr, Eriksson,
Commercial Counselor of the Swedish
Legation in Washing!cm, acting
jointly, in accordance with the power
of attorney dated May 6, 1940,
referred to in the letter dated May
25, 1940, from Mr* Bostrom to the
Secretary of State, and the letter
dated May 28, 1940, from the State
Department to the Federal Reserve
Bank of Mew York}*•
9/25/40 Balance $100,791,178.98
Gold Accounts
No designation
9/25/40 Balance f -0Designated as is second dollar
account above*
9/25/40 Balance, f52,940,157*81
-11-
Regular authorities in
effect except as follows:
In a letter dated May 25,
1940, to the State Department the
Swedish Ambassador enclosed a copy
of a power of attorney from
Sverlges Riksbaatfc empowering Wollmar Bostrcm, Swedish Minister to
the TJ* S*, and Harry Eriksson,
Commercial Counselor, acting
jointly, to dispose of certain
amount of gold to be earmarked in
their names and $65,000,000* The
Minister certified to the authenticity and ralidity of this power of
attorney+
Certified copies of the letter
and power of attorney were transmitted to us by the State Department with a letter dated May 28,
1940, in which it is stated that
the Government of the United States
recognizes and accepts the authority of Messrs* Bostroaa and Eriksson
under such power of attorney,.
or
y Thai Treasury*
9/25/40 Balance f8t999,985+69
In September, 1959p we, as
fiscal agent9 sold to the Royal
Thai Treasury (Slam) 257t142»449
fine ounces of gold, and, we, as
principal, accepted and still hold
all of such gold under earmark for
the Royal Thai Treasury, subject
to instructions first of foonaer
Thai Minister Phya Abhibal Hajamaitri and now of the present Thai
Minister Mem Rajawongse Seni Pramoj*
Total
Total
Foreign
Invaded
Nethercountries
countries
lands
(In millions of dollars)
Dollar deposits in
commercial banks
1/
2,393
620
148
158
14
5
5,597 J/
1,529 i/
780 i/
650 5/
364 i/
126 i/
Other short-term banking
assets in commercial banks 2/
Securities
(market value)
All other assets (market value)
Total of above
8,798
2,527
1,057
1/ Source: Reports of banks and bankers in Second District only as
of September 25, 1940, except that figures for Lithuania and
Esthonia included in total in second column are taken from
special treasury report as of July 10, adjusted in case of
Lithuania for Lithuanian deposits at Federal Reserve Bank of
New York as of that date. (Figures for other Districts
insignificant*)
2/ Same as above, except that no separate figures available for Luxemburg and three Baltic countries in making up total in second
column*
Z/ Source: Department of Commerce estimates for end of 1939*
4/ Source: Special reports to the Treasury as of various dates from
April to July 1940 (Netherlands reports as of May 10, 1940),
including assets held in the name of residents in the overseas possessions of the invaded countries.
@FedFRASER