DEPARTMENT OF 8TATE
WASHINGTON
July 5, 1940
CONFIDENTIAL
Excellency:
I have the honor to Inform you that the American
Ambassador In London, In a telegram dated June 20, 1940,
has transmitted the following text of a note marked
"Secret" and dated June 20, 1940 addressed to him by
the Foreign Office:
"I have the honor to state that discussions
have recently been proceeding between His Majesty's
Government in the United Kingdom and the Bank of
England and His Majesty's Ambassador at Washington
with a view to safeguarding His Majesty's Govern-
ment's assets in the United States of America
against the risk of possible attachment at the
instance of enemy interests.    Certain of these
assets are at present held at the Federal Reserve
Bank of New York in the name of the Bank of England
and it is proposed that such assets should on the
grounds
His Excellency
The Right Honorable
The Marquess of Lothian, C.H.,
British Ambassador.
grounds of safety be transferred Into the name
of His Majesty's Government.
"His Majesty's Government have now been
advised by Lord Lothian that the United States
Treasury have requested and authorized the Federal
Reserve Bank of New York to open accounts in the
name of His Britannic Majesty's Government. The
Federal Reserve Bank have confirmed this authority
to the Bank of England and have asked that the
necessary requests and instructions should be
telegraphed to the United States Government through
Your Excellency.   Accordingly I have the honor to
request Your Excellency to be so good as to address
to your Government for transmission to the Federal
Reserve Bank of New York a cable embodying the
following requests and instructions:
"(A)   His Majesty's Government request the
Federal Reserve Bank to open the following accounts
to receive dollar and gold balances now held on
similarly designated accounts in the name of the
Bank of England:
Currency Accounts
His Britannic Majesty's Government
current account 'F'
His Britannic Majesty's Government
current account 'G'
His Britannic Majesty's Government
special account 'A'
Gold Account
His Britannic Majesty's Government
No. 3 account
"(B) His Majesty's Government request the
Federal Reserve Bank to accept on their behalf
the
-3-
the instructions of the Bank of England in all
matters relating to such accounts. These
Instructions will continue to have effect until
notice of cancellation of authority is given by
His Majesty's Ambassador at Washington or by the
Counselor to the British Embassy at Washington in
-
accordance with arrangements already known to the
Federal Reserve Bank.    In that event the emergency
signing procedure will take effect in respect of
all accounts in the name of His Majesty's Govern-
ment with the exception of special account 'A'
which will continue to be operated by the same
signatories as at present.    The authority extended
to His Majesty's Ambassador in Washington and to
J. A. C. Osborne under the emergency signing pro-
cedure includes power to delegate authority to
operate on the accounts in favor of any person
or persons whom either may specify.
"(C) His Majesty's Government certify that
all gold and dollar balances now or in future
to be held for the above accounts are the
property of His Britannic Majesty's Government.
"(D) His Majesty's Government request the
Federal Reserve Bank to continue to forward to
the Bank of England as heretofore all advices
and statements of accounts, et cetera.
"The Federal Reserve Bank have made a further
request that His Majesty's Ambassador at Washington
should by letter addressed to Mr. Hull confirm the
foregoing and also certify the legality and authority
thereof.
thereof.    In view of the fact that by virtue of
this letter His Majesty's Government are them-
selves making these requests in connection with
their own assets, it is not clear what further
confirmation or certificate of legality is re-
quired.   I should he grateful to know that, if
necessary, the United States Government would be
prepared to confirm to the Federal Reserve Bank
that the foregoing instructions emanate from His
Majesty's Government."
Accept, Excellency, the renewed assurances of my
highest consideration.
841.51/1580