361 Embassy in Washington to Department of External Affairs

Cablegram 828 WASHINGTON, 8 September 1949, 7.17 p.m.

RESTRICTED

F.E.C. 117.

Your 499. [1]

Gold for Thailand and France

A firm statement along the lines of your recent telegrams made by the Ambassador at this morning's meeting. Chinese and Indian representatives supported. Comments of various members are summarised as follows:

(a) Chinese representative argued that the action contemplated by the United States was contrary to paragraph 16 of the policy decision on interim import-export policies for Japan. (F.E.C.

232/26). He also referred to page 242 of S.C.A.P. summary of non- military activity of September 1947 and asked why China had been singled out as an exception. He said that no hasty or premature steps should be taken, that this issue was an integral part of Allies general claims against Japan and urged that directive be withheld.

(b) The Indian representative, whilst without instructions on this particular issue, said that his Government was most concerned that the policy-making functions of F.E.C. should be safeguarded and expressed opinion that directive should be fully considered by the Commission.

(c) The United Kingdom representative observed that he would withhold comment for the time being until further evidence as to tide of the gold had been provided.

(d) The French representative pointed out briefly that this question did not fall within competence of F.E.C., but was properly administrative act within competence of S.C.A.P. He said that any discussions about this matter should be conducted through diplomatic channels and that the French Government would not produce evidence of title before F.E.C.

2. We put it to the Chairman that this matter should be urgently considered by F.E.C. before directive was issued. Chairman replied that it was his assumption that the United States Government would give opportunity for further discussion by commission.

1 Dispatched 8 September 1949. Notwithstanding Allison's arguments, reported in Document 360, Makin was instructed to raise the matter in the Commission.

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