811.20 Defense/2829: Telegram
The Secretary of State to the Ambassador in Colombia (Braden)
236. Your 327, August 4, has been discussed with the Treasury. The Treasury officials tell us that they are telephoning the New York banks which issued the letters of credit and are instructing these banks to telegraph to the Banco de Bogotá instructing that bank that no drafts on the letters of credit which have been or shall be drawn on or after July 26 will be honored unless a license is granted by the Treasury. The Treasury will not authorize any such licenses and, therefore, the effect of the foregoing is to cancel or more properly to suspend during the existence of the freezing order, the letters of credit. Please telegraph if this arrangement is satisfactory to the Colombian authorities.
With reference to the closing paragraph of your 327, it has been understood from the telephone conversation of August 1 that legislation subjecting platinum to the same restrictions as gold would be most difficult to obtain. It was furthermore understood that your strong recommendation was that export control be obtained through control of the New York banks, that is to say, by having the Treasury instruct the New York banks that no letters of credit for the export of platinum except to the United States should be issued. The Department has accordingly taken up this proposal with the Treasury and is urging upon them the taking of the necessary steps to carry out the program along these lines. As yet no definite reply has been received, but it is expected that action along these lines will be put into effect by the Treasury. Pending the reply from Treasury, and further consideration of whether this action will be sufficient for the purpose, the Department reserves judgment as to legislation. However, it is noted from your telegram no. 327, second paragraph, that the Commercial Section of the Foreign Office is considering introducing a bill to place same restrictions on platinum as now exist for gold. The Department feels you should encourage this action and in the meanwhile the Colombians should use maximum control possible under their present legal set-up. Smuggling is a problem the Colombians will have to control. The United States is offering to purchase Colombia’s entire platinum output for a year while Japan can give no such assurances.
The Department will be largely guided by your advice.