867N.5151/12: Telegram
The Secretary of State to the Chargé in the United Kingdom (Johnson)
1568. Your telegrams nos. 2112 of October 21, 2126 of October 23, 2196 of October 28 and your despatch 3743 of November 3, 1939 and telegram No. 2554, December 6th.32 The following should be forwarded to Jerusalem if you concur in the Department’s understanding as contained in paragraph 2:
“Your 16, November 16, 1 p.m. and 18, November 17, 11 a.m.
- (1).
- The exemptions granted American nationals resident in Palestine as described in your no. 16 and no. 18 appear to differ in certain substantial particulars from exemptions granted American nationals resident in the United Kingdom who do not also possess British nationality.
- (2).
- It is the Department’s understanding that such American nationals are exempt from declaring their securities whether acquired before or after the date when the regulations went into effect except securities acquired subsequent to that date from a person subject to the regulations. American nationals are also not to be called upon to surrender foreign currency balances acquired before the date when the regulations went into effect nor balances acquired after that date provided (a) that the acquisition of these balances has not been in contravention of other sections of the Defense (Finance) Regulations, and in particular has not resulted from the sale of sterling balances for which permission must be obtained, and (b) that the foreign currency balances have not been acquired in the course of current trade and similar transactions.
- (3).
- The Department is making full reservation of its rights in connection with the application of exchange control regulations improperly affecting the rights of American nationals. You should refer to the Department the inquiries of any American citizens who may be in doubt as to whether their rights would be infringed by compliance with those regulations.”
You are requested to make suitable inquiries as to whether the further concessions to foreign nationals in respect of exemptions from the Defense (Finance) Regulations as described in your 2196 and enclosures nos. 2 and 3 of your despatch have been communicated to the colonial empire and administrations of the mandates, including that of Palestine.
If they have been communicated please ascertain the date on which this was done and also inform Jerusalem. If they have not been communicated, you should urge that such action be taken at once.
In making these inquiries you should state that they are not to be interpreted as prejudicing this Government’s position regarding the application of exchange control regulations improperly affecting the rights of American nationals, concerning which this Government desires to make full reservations.33