360 Embassy in Washington to Department of External Affairs
Cablegram 820 WASHINGTON, 7 September 1949, 7.34 p.m.
Late this afternoon we were called to the State Department by
Allison who, under instruction from Butterworth, reported at
length the United States position with regard to the transfer of
gold from Japan to Thailand and France.
2. Following is summary of his comments:
(a) The decision to take this step was approved by President
Truman personally after consultation with the Departments of
Defence, State, Treasury and the Attorney General.
(b) The United States Government is certain that they are legally
correct in transferring gold otherwise they would not have taken
this decision. The State Department is preparing a factual
memorandum about the legal position for distribution to friendly
Stressed again that Thailand's legal right to earmark gold was not
connected with Austr[al]ia's claim for compensation from Thailand.
(c) Allison pointed out that U.S.A. believes that U.S.A. is
entitled to a Major portion of the gold belonging to Japan.
Therefore, if this amount is not accepted as belonging to Indo-
China and Siam, it may be claimed later by the U.S.A. for
(d) They stressed the political significance of proposed move in
(1) To contain Communism in Asia and,
(2) To assist the French in the interests of the Western Union and
the Atlantic Pact. 
Referred to the geographical position of Australia and expressed
the opinion that we might view the situation in its widest
(e) Said that if this issue were raised by Australia at F.E.C.
meeting tomorrow, it would give the Soviet a 'chance for a field
Suggested that we ask you not to raise the issue in the meeting
tomorrow. In this event, the United States would delay the
issuance of a directive to S.C.A.P. for a further week to allow
time for further negotiation (i.e. for another fortnight).
(f) Allison gave the impression that the United States had made
firm decision to issue directive.
3. We felt you should be advised of the foregoing immediately.