January 26^th is the day that US policy changes in an enormous way. For the better. And the change comes from……[drum roll]….the State Department.

So if you remember back on January 21^st, I showed you the ridiculous license paperwork for Gerhard Riegner to do relief and rescue work in France and Romania.  Let’s recap, with an example. Say the World Jewish Congress sends Gerhard Riegner $25,000 in Swiss francs.  If you are Riegner and need to trade these francs into Romanian lei, you have two options:

1)     You can find someone in Switzerland who will give you $25,000 worth of Romanian lei, and you will put the Swiss francs in a Swiss bank account. They can access their money only after the war.

2)     You can find someone in Switzerland who will give you $25,000 worth of Romanian lei. They can have the Swiss francs now if you can prove they had all the lei in Switzerland prior to October 1, 1940.

So it was a terrible deal for Riegner, and a terrible deal to anyone lending him money.  (And trying to understand these rules when English isn’t your first language couldn’t have been that easy.)

On January 22^nd, the day the War Refugee Board is announced, members of the Vaad Hatzala (the emergency rescue wing of the Union of Orthodox rabbis) went to see Undersecretary of State Adolf Berle.  They wanted to send money to their representative in Switzerland.

Berle gives them permission, and adds a 3^rd way they can obtain the currency trade. Their representative, Isaac Sternbuch, could do one of the options above, BUT, if he can’t do that, as a last resort, he can send the Swiss francs into enemy territory and trade them directly. This is a HUGE change in policy.

The memo below shows State Department reaction when one of the State Department guys sees the text of the new license.  The best paragraph is at the top of the second page: Mr. Berle was firmly of the opinion that the ‘no ransom’ policy was probably no longer suitable to the times, and that in this case, he definitely approved permitting payment of free foreign exchange into Axis or Axis-occupied territories.”

Huge. Game changing.  It’s still used as a last resort, but it gives relief agencies flexibility, and allows them to send money to places they previously weren’t able.  It makes a big difference in the end.