Foreign Relations of the United States: Diplomatic Papers, 1943, Europe, Volume II

740.00112 European War 1939/9035: Telegram

The Ambassador in the United Kingdom ( Winant ) to the Secretary of State

London , August 5, 1943.
[Received August 5—3:42 p.m.]

5105. For Department and OEW⁵⁰ from Riefler. The Swiss Minister in London has handed Foot and me the following memorandum containing the Swiss Government’s reply to the message quoted in the last part of my 4590 of July 15th:

“Memorandum.

1. Upon receipt of Mr. Foot’s letter of July 19, 1943, containing the British observations to the Swiss proposals for a resumption of trade discussions with Switzerland, M. Thurnheer had not failed to communicate with his Government on the subject.

2. M. Thurnheer has now been advised that the Swiss Government’s answer to the above British note has been communicated by the head of the Federal Department of Public Economy to His Majesty’s Minister in Berne, on July 30, 1943.

3. M. Thurnheer takes pleasure in enclosing herewith an English translation of the gist of the Swiss note referred to under paragraph % based on the communication received from Berne in this connection. In case of any discrepancy with the text or the translation received by Mr. Foot from His Majesty’s Legation in Berne, M. Thurnheer remains at Mr. Foot’s full disposal for a closer comparison, and if necessary for enquiries in Berne.

4. On the basis of a preliminary survey, M. Thurnheer feels that the Swiss authorities have indeed endeavoured to meet the British wishes to the fullest possible degree. He would thus be grateful to Mr. Foot for an early examination and consultation with the U.S. authorities, with a view to enabling if possible the Swiss Delegation to return to London at an early date.

3d August 1943.

Translation.

The Federal Department of Public Economy have the honour to reply as follows to the memorandum of the British Legation dated 17th July, 1943, by which His Majesty’s Government’s point of view with regard to the Swiss proposals of 10th July 1943, had been conveyed.

1. It is correct that the proposals formulated by Switzerland prior to the reopening of negotiations in London did not deal with exports to Axis countries other than Germany. The Swiss Government very much regret that this omission should have given rise to some hesitations as to their real intentions in the mind of His Majesty’s Government and thus delayed the reopening of discussions. In fact, the Swiss Government have never intended to evade the export restrictions to Germany by increasing deliveries to the other Axis countries.

2. The following proposals underline the Swiss Government’s desire to satisfy the demands of His Majesty’s and the American Governments, as formulated in the memorandum of 17th July, 1943.

I. The Swiss Government will naturally not take any measure likely to frustrate His Majesty’s and the U.S. Governments of the advantages which have been conceded to them in the matter of export restrictions.

II. For the second half year of 1943, the Swiss Government are prepared to limit to 50% of the export value of 1942 supplies to Axis countries other than Germany (a) of manufactures under Swiss customs tariff items 753/56, 809a1–a3, M6, 914h, 935d, 936d, 937, 948a and 954a. This means for each tariff item a global quota embracing the whole of these countries. (b) Of manufactures under Swiss customs tariff items 811/813, 1083 and 1084. Each of the Axis countries will be allocated a global quota for the whole of the above items. (c) As regards Germany, the Swiss Government confirm their previous proposals, (d) Should any serious inconveniences result from the rigid application of these restrictions for the Axis countries other than Germany, the Swiss Government reserve the right to inform the British and American Governments thereof during the course of the prospected discussions.

III. (a) The Swiss Government are prepared to reduce during the second half year of 1943 to 50% of the export value of 1942, exports of manufactures under Swiss customs tariff items M9 and 956a–f. This means a global quota, applying to the whole of the Axis countries. (b) The export of manufactures under tariff item MDY is of capital importance to ensure occupation for the workers. In the present circumstances unemployment would entail the gravest consequences from the social point of view, as well as from the political point of view. The Swiss Government are nevertheless prepared to fix for the second half year 1943 a ceiling of 11,000,000 francs for exports of these manufactures to the whole of the Axis countries, whereof not more than 7,000,000 to Germany.

IV. The Swiss Government confirm: (a) That as from July 1, 1943, exports to Germany under tariff items 811/813, 1083/1084, 948a, 753/56, 914h and 937a have for the second half year 1943, been reduced to 40% of values of exports in 1942; (b) that exports to Germany under tariff items 809a1–a3, M6, 935d, 936d and 954a will as from August 1, 1943, and for the remaining 5 months of 1943 be reduced to 33⅓% of values of exports in 1942.

V. The Swiss Government are prepared, according to the desire expressed by His Majesty’s Government, to introduce a quota in respect of exports of watchmakers’ tools of tariff item 747. A global quota, equal to 50% of values of exports in 1942 will be applied to all Axis countries.

VI. The Swiss Government will take all appropriate measures to prevent that an unjustified reduction in price could falsify the quota value, and thereby entail an increase in quantities and pieces exported.

3. The Swiss Government take this opportunity to confirm to His Majesty’s and the U.S. Governments that in their opinion the offer for a reduction of exports of dairy produce to all Axis countries should have had as counterpart the authorisation to import into Switzerland fodder, especially oats destined for the Swiss Army.

4. The Swiss Government sincerely trust that these new proposals will allow the British and American Governments to authorise anew the supply of foodstuffs to Switzerland, and to fix an early date for the reopening of discussions in London.

Berne, 30th July 1943.”

Begin proposal. The Swiss reply substantially accepts our proposal cited above. If you approve, Foot and I would, therefore, propose that we convey to the Swiss Minister here a reply embodying substantially the following points:

1. We intend to restore half food quotas from now on, provided that (a) the Swiss observe the restrictions on exports of arms and machinery to which they have now agreed; (b) that no further difficulties are raised over supplies to the two missions of Swiss francs;(c) that the Swiss Government will not increase in any way its contribution to the Axis war effort, (e.g., by increasing the number of vehicles repaired).

2. Adjustments will need to be made for any country or area dropping out of the war.

3. We also propose to inform the Swiss that we intend to resume pressure on arms and machinery firms.

4. We shall be prepared forthwith to grant navicerts for a further consignment of oats for Swiss Army use, even in advance of the Swiss obtaining corresponding Geleitscheine.

5. These arrangements will be subject to termination when the Swiss frontier is open. At that point the Allies will expect to enter into further commercial arrangements with Switzerland, with a view to more considerable reductions in Swiss trade with the Axis.

As regards any existing commitments which Switzerland may have with Germany limiting the range or volume of Swiss exports to the outside world, we shall then expect the Swiss Government to resume its freedom of action.

6. We are willing in principle to receive the Trade Delegation in London, but we think its return had better be deferred for a few days until the present military and political situation becomes clearer. The Delegation should in any case be prepared to discuss the new arrangements to be made when the Swiss frontier is open. End proposal.

Please telegraph prompt instructions embodying the views of the Department and OEW. [Riefler.]

Winant

50. Office of Economic Warfare, successor agency of the Board of Economic Warfare.