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BDARD DF GOVERNORS
DF THE

FEDERAL RESERVE SYSTEM

Dffice Correspondence
j0

Chairman Eccles

Frnm

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fo^PP

p f l t e February 3,1948
Subject: letter from Secretary Snyder
Senator'Vandenberg re dealing with hie
European assets in the United States.

In a letter dated yesterday, Secretary Snyder informed Senator
Vandenberg, as Chairman of the Senate Foreign Relations Committee, of the
program approved by the National Advisory Council for dealing with hidden
European assets in the United States, emphasizing at the same time the
Council's view that it would not be wise to force European countries to
14gp|date the private holdings of their nationals as a prior condition to
the receipt of aid under the European Recovery Program.
In his letter, Mr. Snyder estimates the amount of readily
mobilizable and "directly held11 blocked assets of European countries at
400 million dollars (France—100 to 150 million); and the "indirectly
held" assets (mainly those held through Switzerland hy residents of other
Western European countries) at 300 million dollars (France—200 to 250
million). The total amount of readily mobilizable assets affected by
the program is therefore estimated at 700 million dollars, about half
of which would be French.
The following paragraphs from Secretary Snyderfs letter describe
the factors taken into consideration by the Council in arriving at its
endorsement of the Treasury-Justice Department program:
"The policy we should adopt with respect to assisting
the recipient countries in obtaining control of the private
dollar assets which are hidden in this country Icy their citizens has been a subject of much discussion in recent months.
Representatives of financial institutions have urged that it
is fundamental to our free private enterprise system and, in
particular to our capital market, to respect private property
whether or not it is held by foreign nationals. Some felt that
the United States Government should not adopt the policy of
cooperating with foreign countries in the enforcement of their
exchange control laws. Finally, it was argued that to adopt
measures having the effect of forcing the disclosure to foreign
governments of private property held by their citizens in the
United States would put this Government in the position of supporting partial confiscation of private property. This last
point relates to those cases where foreign countries require the
surrender of dollar assets, against reimbursement in local currency at unrealistic rates of exchange.




•Tha National Advisory Council gave serious consideration
to these views. The Council doubtedttiatunder ordinary conditions

To: Chaiiman Eccles

-2-

this Government should assist foreign governments in enforcing their foreign exchange laws* However, these are not
ordinary times. Some European countries are in dire need
of dollars to permit their survival as free nations* American
taxpayers are being called upon to make substantial contributions to European recovery. Moreover, most of the foreign
governments have repeatedly asked our assistance in obtaining
control of the holdings of their citizens, who have concealed
them contrary to the laws and national interest of their
countries. It is these circumstances, I am sure, which have
inspired marked public interest in the problem and have produced various legislative proposals for action, such as the
Runkel Bill (H.R. 4576) and the Norblad Resolution (H.J. Res.
268).
"The Council studied in detail many alternative proposals
for dealing with this problem in an effort to arrive at a
solution which would assist recipient countries to obtain
the use of conoaaled private assets in the United States
without doing violence to the traditional status of private
property* None of these alternatives promised at the same
time actually to protect the private interests of foreign
nationals, to assist the recipient countries to mobilize the
concealed dollar assets of their resident citizens, and to
prevent the escape of concealed enemy assets."