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Back in Washington, White House Adviser Lloyd Cutler left a farewell party at which he was co-host for President Carter at the F Street Club and went to the office of Deputy Treasury Secretary Robert Carswell. From 11 p.m. Thursday until 2 a.m. on Friday, the two worked on ways to speed the transfer of funds. Carswell was back in his office at 7 a.m., talked to Christopher by telephone, then rushed off to a 7:30 a.m. breakfast at the White House. There, in a meeting described by one participant as "unusually upbeat," the President approved an order to "preposition" some of the Iranian money.
The first actual shifting of assets took place a few hours later on Friday morning. Acting on a transfer contract signed by Treasury Secretary William Miller, officials placed a label on some 4,000 gold bricks stored in a federal building in Manhattan, denoting the Bank of England as the new owner. Simultaneously, other new labels in the Bank of England switched an identical amount of British gold into U.S. possession under instructions that it be ready to turn the gold over to Iran once the hostages were free.
At about the same time, Carter ordered the New York Federal Reserve Bank to begin converting the $1.2 billion in U.S. Treasury securities owned by Iran into cash. Although this process would normally require several days to accomplish, the U.S. could in effect simply loan itself the equivalent cash and then sell the securities later. All of the initial cash transfers were meant to show that the U.S. was acting in good faith—especially in view of the arbitrary deadline set by Iran's Nabavi, who mysteriously threatened to break off the whole deal if the Americans failed to take some concrete action by the end of Friday's business day. State Department officials viewed this as mostly a bluff, but could not ignore it entirely.
The movement of Iranian money from the various European branches could not be executed quite so quickly. Still, the task apparently could be handled mainly by telephone once each bank determined the precise amounts to be credited to Iran. Said a banker in Frankfurt: "All I need is a phone and a key to get in the front door. It's not a complicated thing." Most of the branches keep funds on deposit at their home offices in the U.S., and each bank's top officials apparently could order them transferred to the Federal Reserve System. The Fed, in turn, could order the funds held in escrow by the Bank of England. Iran seemed likely to trust the English bank, which had loudly protested the freezing of Iranian funds in the first place.
In a Friday filled with crisis-atmosphere meetings in Washington, London and Algiers, the money mechanics got the most intense attention. But at the same time an American response to the latest Iranian package was carefully drafted by Christopher after frequent consultations with Washington. It was sent to Tehran through the Algerians in time to be on the desks of Iranian officials on Saturday morning.