359 Department of External Affairs to Embassy in Washington and Noel-Baker

Cablegrams 485, 154 CANBERRA, 6 September 1949, 6.10 p.m.

CONFIDENTIAL

Release of gold to Thailand and France. Your FEC. 113. [1]

1. We have now informed U.S. Embassy in reply to their Aides- memoire of 31st August and 5th September that after careful study Australian Government is unable to support either substance of U.S. proposal or manner of its implementation. Following is summary of points in our Aide-memoire:

2. Notwithstanding United States citation of international law and monetary practice, Australian Government is not convinced that Thai and French tide to the gold has been clearly established, particularly having regard to abnormal conditions prevailing at time Japan is stated to have earmarked gold for Thailand and France. Between 1941 and 1943 Thailand was at war with Australia and other countries and Indo-China was under Japanese occupation.

In absence of detailed information Australian Government assumes that services on which Thai and French claims rest were performed in furtherance of Japanese war effort against allies.

3. Gold should properly be regarded for present purposes as part of Japan's assets and its ultimate disposition laid down in peace treaty. Even if regarded as transferred the gold should still be regarded as enemy assets in possession of occupying forces and available to meet war damage and other claims made by Allied on enemy countries.

4. Matter should in any event be fully considered and voted upon by FEC before any directive sent to SCAP.

5. Full texts by air bag. [2]

1 Dispatched 1 September 1949. It reported that the Sate Department (a) could not postpone notifying the Far Eastern Commission of the directive and (b) considered Australia's claim for compensation to be unconnected to Thailand's legal right to earmark gold.

2 The UK Government replied on 19 September 1949 that it would not raise die matter in the Commission; see letter from Kimber to A.S.

Brown, Secretary, Prime Minister's Department.

[AA:A1838/2, 479/10/11]