File No. 763.72112/4676
The Acting Secretary of the Treasury ( Crosby) to the Secretary of State
[Received September 7.]
My Dear Mr. Secretary: I have the honor to acknowledge receipt of your communication of the 28th of August, enclosing copy of a note from the British Ambassador stating that his Government considers that the time has come for bringing pressure to bear upon neutrals in order to deter them from rendering financial assistance to the enemy.
It seems not improbable that, to a considerable extent, the objects of the publications proposed by the British Government to be made in certain neutral countries can be attained by a control of foreign [Page 943] exchange and the transmittal of various forms of commercial paper. Such control is now about to be established under recent proclamation of the President, that proclamation being based upon the authority granted to the President by an act of Congress known as the Espionage Act.
In going beyond the limits which could be attained in the method just indicated, it may be that such grave questions of international relationship would be raised that a policy in respect to these should first be determined before intelligent study could be given to the details of the plan proposed by the British Government. If I am advised by you that it is desired that the extreme steps proposed by that Government should be taken by this Government, and no question of neutral rights would be involved in a way to which you would object, I will be glad to make a recommendation as to the advisability, from the point of view of this Department, of the additional value obtained from the proposed steps in our endeavors to diminish the commerce of the enemy over those obtainable under existing legislation.
In the meantime [etc.]