Foreign Relations of the United States: Diplomatic Papers, 1944, Europe, Volume IV

740.00112 European War 1939/7–1144: Telegram

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

Washington, July 13, 1944—7 p.m.

5495. For Riefler and Lovitt.

1. After carefully weighing all the factors involved with a view to obtaining the most satisfactory agreement possible with the Swiss, especially in terms of our present economic warfare attitude toward Switzerland and other neutrals (as outlined below), we authorize you in agreement with MEW to inform Keller that we accept the ceilings on Annex I items put forward formally by him on July 6, but that our position toward the five demands accompanying his formal offer (which were outlined in your 4228, July 3, and further discussed in your 5472, July 11⁷³) is as follows:

A. We agree to the prolongation of the December 19 agreement provided that the ceilings on Annex I conforms as of now to the Swiss offer of July 6. In return we are willing to concede the special quotas for flour-milling machinery, thermometers, and locomotives (subject to delay in delivery of locomotives until after September 1 and justification of price therefor as contained in section 3 of Bern’s 4232, July 3,⁷⁴ repeated to London as 1150). We would also accept revision of Article VII and VIII of December Agreement along the lines requested by the Swiss. A new situation will undoubtedly arise upon the opening of the Swiss frontier, and we insist upon confirmation of the terms of the December Agreement and accordingly that any new Swiss-German agreement should allow Swiss liberty of action as soon as the Allies have access to Switzerland. (At such time we would expect to ask for an embargo on Swiss exports to Germany). In order that the Swiss should be in such a position, it is obvious that they should make no commitment in trade agreement about to be entered into with Germany covering the next 6 months which would negative this objective. The Swiss are also put on notice that changing military developments may make it necessary for us to request lower ceilings or even an embargo on Swiss exports of certain commodities to Germany even before the Swiss frontier is opened. You will make this clear to the Swiss, and will add that they should also bear this in mind in their current negotiations with the Germans.

B. In view of military developments, which in effect have led to the practical cessation of Swiss transit facilities in France (your 5405, July 8⁷⁵) and which increasingly jeopardize security of shipments in transit to Switzerland, we agree that we cannot approve quotas for industrial raw materials at the present time. We would suggest that the Swiss merely be informed that we will be willing to discuss with them, in advance of the opening of free access to the Swiss frontier, the opening at that time of raw material quotas in return for objectives we may then desire. With reference to Paragraph 6 of your 5414,⁷⁶ we cannot agree at this time to expand the food and fodder import quotas under the December Agreement to include related agricultural requirements such as copper sulphate, certain chemicals, and brewing malt. We are reluctant to agree to the stockpiling in Lisbon, for eventual shipment to Switzerland, of cotton and wool, since we believe our later bargaining power vis-à-vis the Swiss would be weakened to the extent that they attach importance to such stockpiles. Moreover, it opens an opportunity for further bargaining. However, if you and MEW feel strongly that agreement to such stockpiles would obtain Swiss acceptance of the proposed ceilings, and that the ceilings would otherwise be unacceptable to them, you are authorized to agree, subject to the following conditions:

1. The quantity to be permitted will be determined by FEA and MEW after Swiss acceptance of the ceilings.

2. The stockpiles will be charged against our Compensation Deal indebtedness.

C. Because of the reasons stated above, we agree with your position that we cannot accede to this demand.

D. We cannot agree to the carrying forward of unused balances of quotas under Annex I from the first to the second half of 1944. Acceptance of this demand would contradict our previous policy towards Sweden and Switzerland with respect to unused quotas and would establish an unhealthy precedent for future agreements.

E. As to the Viscoe Swiss case, we agree with your position that we cannot discuss it further until we have received the Swiss reply to the proposals made by the blacklist authorities. We assume that these proposals were concurred in by the Proclaimed List Committee in Washington.

According to our information, axle bushings, articulation bearings, and flexible joints are capable of use in substitution for ball bearings. If this is confirmed by EWD and MEW, it will be necessary for you to insist, therefore, that there should be a clause in the Agreement placing a nil ceiling on these commodities.

2. For your information, our position towards the Swiss offer of July 7 [6?] (as stated above) is based upon the rapid changes in the military situation (even since June 15) which has caused us to change our whole economic warfare attitude toward the Swiss and the Swedes. We are firmly determined at this stage of the war not to indulge in protracted negotiations with the neutrals on concessions which they demand from us in return for compliance with our requests to cease or to reduce their economic aid to the enemy. We now believe that we can expect far more from the Swiss than before recent military developments. In other words, we are attempting to implement more effectively our policy toward the neutrals as outlined in the address of the Secretary of State on April 9.^76a

To this end the Secretary is convoking the Swiss Minister to inform him that our policy toward the neutrals was fully and clearly stated in his address of April 9; that this Government has realized the difficult situation of Switzerland resulting from its geographical position and dependence on the Axis for certain raw materials and because of these considerations and since we believe that the Swiss Government was sincere in its expressed desire to curtail exports to the Axis to a minimum provided Swiss national security was not threatened by such action, we have shown great patience during the current negotiations. It has now become abundantly clear, however, that the Swiss have taken advantage of our sympathetic understanding of their problem and have deliberately delayed concluding an agreement by conditioning their latest offer upon the acceptance by us of demands which introduced into the negotiations new and disturbing factors. The very fact that the Swiss authorities feel themselves able to make proposals as indicated in their offer of July 6 proves that they do not consider that the export ceilings proposed therein would place them in a dangerous position vis-à-vis Germany. Our patience is now at an end.

The Secretary will continue to the effect that our negotiators in London are informing the Swiss of the maximum extent to which it is possible for us to meet the new Swiss demands. It is necessary that an agreement be concluded at once based upon the most recent Swiss offer and our very reasonable reply. In view of the necessity of fixing at once maximum limitations for Swiss exports in this and the immediately following months of products of military importance to Germany, we must ask that the Swiss Government conclude an agreement forthwith upon the above basis. It will, furthermore, be pointed out to the Swiss Minister that the future interests of Switzerland would best be served by ceasing to give aid and assistance to the enemies of the United Nations.

It is believed that our views as outlined above could be brought home most forcefully to the Swiss Government were the British Foreign Secretary to convoke the Swiss Minister in London to inform him in a similar sense. The Ambassador is being requested in a following telegram to take this matter up with Mr. Eden.

Department would appreciate cable from you at earliest possible moment as to whether MEW agrees with us on what should be told Keller. In presenting this matter to MEW, you may inform them that this telegram represents the considered opinion of the Department of State and FEA and that it is our strong desire that an appropriate note should be sent to Keller immediately.⁷⁷

Hull

73. Neither printed.
74. Not printed.
75. Not printed.
76. Dated July 8, p. 741.
77. Department of State Bulletin, April 15, 1944, p. 335.
77. Two letters were sent to Mr. Keller on July 15; texts of the letters were transmitted to the Department in telegram 5624, July 15, from London not printed.