LETTER TO JOHN A. MCCONE FROM DOUGLAS DILLON

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R002900140014-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 21, 2016
• Document Release Date: July 28, 2008
• Sequence Number: 14
• Publication Date: December 19, 1962
• Content Type: LETTER

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December 19, 1962
DHS Review Completed.
Dear John:
Thanks very much for your memorandum of
December 15 on Soviet gold sales. I will
appreciate your letting us know of further
developments.
With best wishes,
*incerely,
Douglas Dillon
TREA has not
reviewed.
Processed
IAW CIA
TREA
arrangement
letter dtd
4/11/08.
The Honorable John A. McCone
Director
Central Intelligence Agency
Washington 25 - D.C .
t iTIJiN. 1
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- _--__._. ~....? r-o ANTI FRUITTUM
SECRET
UNCLASSIFIED CONFIDENTIAL
CENTRAL INTELLIGENCE AGENCY
OFFICIAL ROUTING SLIP
2 1 j,Z
CONCURRENCE I I INFORMATION
A copy has gone to DD/I
for information and follow up.
FOLD HERE TO RETURN TO SENDER
Executive Director 1
UNCLASSIFIED CONFIDENTIAL
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ROUTING AND RECORD yhti
CHIEF
TECHNICAL SERVICES DIVISION
U.S. SECRET SERVICE REQUEST FOR EQUIPMENT
TO: (Officer designation, room number, and
building)
. Bldg.
FORM
3-62
610
USE PREVIOUS
EDITIONS
OFFICER'S
INITIALS
24 January 1963
COMMENTS (Number each comment to show from whom
to whom. Draw a line across column after each comment.)
Ik SECRET ^ CONFIDENTIAL ^ USEE ONLY El UNCLASSIFIED
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morable Douglas Dill
ry of the Treasury
Washington 23, D. C.
Dear Doug:
In response to your gnestion concerning recent Soviet gold
sales in the London market, our analysts have prepared the
enclosed memorandum. We believe the aunount and the timing
of gold sales since 24 October are in line with Soviet foreign
exchange requirements arising very largely from their trade
deficit with Western Europe.
We shall continue to follow Soviet sales closely and shall
advise: you of any significant developments.
Sincerely.
John A. McCune
Director of Central Intelligence
Distribution:
Orig. and 1 -Addressee
.DCI
2 > DD/I
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CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
1.2 December 1962
SUBJECT. Significance of Recent Soviet Gold Sales
1. The abrupt occurrence of large Soviet gold
sales in London beginning on 24 October led to specu-
lation that they represented a Soviet response to un-
anticipated financial obligations resulting from the
Cuban crisis. The size and timing of these sales,
however, was consistent with the seasonal pattern gen-
erally characteristic of Soviet offerings since the
entry of Soviet gold on a large scale in internation-
al bullion markets beginning in 1953. The Soviet
"gold selling year" usually lasts from fall (general-
ly October) to late spring. With the major exception
of 1960, when the USSR withheld gold from internation-
al bullion markets apparently in anticipation of an
increase in the U.S. gold price, this pattern has been
generally followed.
2. For the most part, the USSR sells gold in in-
ternational markets in anticipation of foreign exchange
needs; i.e., to obtain foreign exchange to settle in-
debtedness for Soviet purchases. The volume of Soviet
gold sales is generally a function of the success which
the USSR has in selling commodities in international
markets; that is, that portion of Soviet imports from
the West which cannot be financed by commodity exports
is paid for by sales of gold. Currently the USSR's
balance of payments is subject to additional pressures
because of the need to repay some of the medium-term
credits which the Soviet Union has obtained from Western
countries since 1959.
CRET
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vu lw.L
,maw
not unusual. The USSR frequently sells its gold in
large individual lots. For example in March 1961,
when no international crisis was in evidence, sales
during a one-week period amounted to approximately
$60 million. Similarly large lot sales occurred in
other years, as in April 1959 when $50-75 million
worth was sold in a two-day period.
4. As shown in the accompanying table, annual
Soviet gold sales since 1953 have averaged about
$185 million--an order of magnitude with which 1962
sales of $192 million* appear generally consistent
5. We have no evidence that the recent large
volume of Soviet gold sales has been related to the
Cuban crisis. Apparent additional Soviet charter-
ing of Western vessels occasioned by Cuban trade in
October, for example, would require only a few mil-
lion dollars at the most. Nor is there any evidence
that Soviet gold sales have been in any way related
to Cuban economic needs.
SE
ZORET
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Soviet Gold Sales
1953-1962
Year
Million US$
Year
Million US$
1953
150
1958
182
1954
93
1959
303
1955
70
1960
125
1956
154
1.961
311
1957
275
1962
192*
*Through 10 December.
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