Foreign Relations of the United States Diplomatic Papers, 1940, General, Volume I

840.51 Frozen Credits/326: Telegram

The Acting Secretary of State to the Chargé in Latvia (Packer)

Washington, August 7, 1940—5 p.m.

118. Your 209, July 19, 6 p.m. Treasury furnishes the following reply:⁴

“You are advised that the following transactions involving property in which Latvia, or any national thereof, has at any time on or since July 10, 1940, had any interest, direct or indirect, may be effected only pursuant to a license issued pursuant to Executive Order No. 8389, as amended, and Regulations issued pursuant thereto: (a) all transfers of credit between any banking institutions within the United States; and all transfers of credit between any banking institution within the United States and any banking institution outside the United States; (b) all payments by or to any banking institution within the United States; (c) all transactions in foreign exchange by any person within the United States; (d) the export or withdrawal from the United States, or the earmarking of gold or silver coin or bullion or currency by any person within the United States; (e) all transfers, withdrawals or exportations of, or dealings in, any evidences of indebtedness or evidences of ownership of property by any person within the United States; and (f) any transaction for the purpose or which has the effect of evading or avoiding the foregoing prohibitions. Applications for a license to effect any of the transactions above referred to may be made to the Federal Reserve Bank of New York by any party to such transaction, whether or not in the United States.

Within the meaning of the Executive Order the term ‘Latvia’ includes the State and Government of Latvia on July 10, 1940, political subdivisions, agencies and instrumentalities and persons acting for the benefit or on behalf thereof, and any and all other governments (including political subdivisions, etc.) to the extent and only to the extent that such governments exercise or claim to exercise de jure or de facto sovereignty over the area which on July 10, 1940, constituted Latvia.

The term ‘national’ of Latvia includes any person who has been domiciled in, or a subject, citizen or resident of Latvia at any time on or since July 10, 1940, but does not include any individual domiciled and residing in the United States on July 10, 1940, and also includes any partnership or other organization, including any corporation organized under the laws of, or which on July 10, 1940, had its principal place of business in Latvia, or which on or after such dates has been controlled by, or a substantial part of the stock or other securities of which has been owned or controlled by, directly or indirectly, one or more ‘nationals’ of Latvia.

Your questions are answered as follows: (1) Yes. The term ‘banking institution’ includes any individual or corporation holding credits for others as a direct or incidental part of his business. (2) No. Accounts subject to the provisions of law above referred to do not become ‘unfrozen’ by reason of subsequent changes of residence or domicile by the persons in whose names such accounts are held. (3) The Treasury Department has licensed the American Express Company to accept and receive payment on drafts drawn on the Secretary of State by United States Foreign Service Officers. The American Express Company’s correspondent in Riga, Latvia, the Latvijas Banka, will cash all such drafts.”

Treasury has issued license to American Express Company permitting it to:

(1) Receive from Latvijas Banka, Riga, drafts drawn on the Secretary of State by Foreign Service Officers and hereafter acquired by Latvijas Banka directly from such Foreign Service Officers.

(2) Present such drafts for payment and receive payment thereof.

(3) Establish and maintain a free dollar account for Latvijas Banka to which account the proceeds of the collections of such drafts shall be credited and

(4) Make payments out of such account on the order of Latvijas Banka of the proceeds of the collections of such drafts.

Welles

4. A preliminary answer had been sent by the Department in telegram No. 108, July 31, 1940 (not printed).