740.00112 European War 1939/8564: Telegram

The Minister in Switzerland (Harrison) to the Secretary of State

3242. In accordance with Department’s instructions in its 1223, May 22, I handed Mr. Pilet-Golaz27 yesterday evening the revised note contained in Department’s 1154, May 14, and presented the oral statement contained in Department’s 978, April 27, as amended by Department’s 1223. Immediately prior to my call, my British colleague also handed Mr. Pilet a note and gave him an oral statement which with unimportant changes in phraseology are identic with ours.

Mr. Pilet informed me that my communications would be laid before the Federal Council at their next meeting tomorrow. He then made following comments.

With regard to implementation of 1941 agreement, Switzerland, he said, invariably complied to the full with her obligations. While he had himself expected an increase in shipments to Germany during May and June of this year he believed that from that time on deliveries of undesirable exports would diminish. He had no doubt of outcome of present conflict and had envisaged a situation which with establishment of a second front, especially in France, would mean that Switzerland would be effectively cut off from contact with the west. He foresaw a period of from 6 to 8 months when Switzerland would have to live on its own fat. Perhaps that time might come this autumn. He had hoped for time in which to accumulate sufficient reserves. He regretted this sudden blow. If there had to be restrictions it would have been preferable if they had been imposed progressively. The Germans would learn of our action and he feared that they might in reply discontinue permission for the transit and exchange of goods with Sweden, Denmark, Slovakia, Hungary, and Rumania which was so important for Switzerland. Or they might no longer permit seaborne traffic between Portugal and Genoa.

Mr. Pilet saw great difficulty in meeting our demand for no new credits. Switzerland had to have coal. She could only get it from Germany. Unlike Sweden, she had no raw material to offer in exchange. It was preferable for Switzerland to grant credits and [Page 843] thereby maintain her factories working and her people employed rather than to use the same money for payment of a dole with its attendant ill effect on morale. If no coal credits were granted, Germans might well arbitrarily increase greatly the price of coal and assume a take it or leave it attitude. In this alternative he saw no practical advantage and it would exclude later repayment of a credit, however tenuous that might be.

Mr. Pilet also stated that outcome of present negotiations with Germans was very uncertain. Germans had taken objection to the steps that had recently been taken by Swiss with a view to cutting down their deliveries to Germany (see my 3041, May 1828).

Mr. Pilet described present situation of Switzerland as that of small country being slowly strangulated and pointed to fact that Axis counter-blockade was in a position to deny to Switzerland the receipt of goods which we might permit through Allied blockade. He also mentioned German complaints respecting the intelligence facilities which we enjoy in Switzerland and remarked that in taking our present decision these and other important factors had perhaps been overlooked.

Lastly, Mr. Pilet emphasized that all he had now said was to be considered solely as an expression of his personal views and that the Government’s reply would be made in due course.29

Harrison
  1. Marcel Pilet-Golaz, Chief of the Swiss Federal Political Department.
  2. Not printed.
  3. See telegram No. 4172 bis, July 14, 9 p.m., from the Minister in Switzerland, p. 854.