740.00112 European War 1939/8657: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received 11:59 p.m.]
3918. Personal [for the Secretary]. Embassy is sending an airgram amplifying the outline of a tentative agreement with the Swedes transmitted in Embassy’s No. 3805 of June 4, and is also telegraphing Swedes basic rations requests together with an indication of the importance the Swedish delegation attach to various items, and a possible basis for a compromise.
In connection with the above-mentioned communications, I have reviewed the progress of the negotiations to date with Riefler, Canfield [Page 779] and Cumming. I have satisfied myself that the concessions offered by the Swedish delegation are really substantial, and probably represent the maximum attainable without bringing the negotiations to a standstill, and that, even with regard to trade in 1943, the Swedes have given us concessions, for political reasons, beyond those which might, from their point of view, be justified solely by the supply advantages to be derived from basic rations. I am equally convinced that our delegation have pressed the Swedes very hard on many occasions for further export limitations in 1943. It would be unwise, from the point of view of retaining advantages so far gained, to attempt to insist upon this point further.
Our negotiators attach the most importance to the value limitations on total Swedish exports to enemy Europe which are greater than they appear to be because Swedish prices are already higher than in 1942 and show a further tendency to rise, to the credit provisions, and to the limitations on the important groups and on most of the key rubrics after January 1, 1944. On the other hand, the limitations on rubrics in 1943 are less effective than I would wish, particularly in the case of iron ore, even when there is taken into account the extent to which Sweden is bound by previously entered into trade commitments for this year.
As to basic rations, the Swedish delegation is, as might be expected, pressing insistently and has intimated that unless its requests are given sympathetic consideration, the delegation may be unable to obtain approval of the Stockholm authorities to the concessions the delegation has offered. In this connection, I am inclined to accept, up to a point, Hägglöf’s view that the proposed agreement will intensify shortages in Sweden and will cause economic dislocation.
I am aware that the Department is pressing for an early solution of the question of oil supplies for Sweden, but I venture to recall to the Department that any settlement in London of the transit traffic question must await Washington’s decision on the oil matter.
After taking into account all the factors which are within my knowledge, I am satisfied that the proposed agreement is the best attainable at this time and recommend its acceptance. The Swedish delegation is most anxious to leave for Sweden as soon as possible because of the uncertainties of air travel between the United Kingdom and Sweden at this time of year and the urgent necessity of preparing for the German negotiations scheduled for the latter part of June or early July. Furthermore, the Swedish delegation have reiterated that their principal motive in coming to an agreement with the UK and US is that of settling promptly the principal questions relating to their overseas supplies and of obtaining supplies promptly before [Page 780] October 1 when, they agreed, the Gothenburg traffic may be closed. Undue delay in settling the principal questions relating to supplies for Sweden from overseas may impel the Swedish Government to withdraw or at least modify concessions offered us by the Swedish delegates in London.