740.00112 European War 1939/8–144: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received August 1—7 p.m.]
6134. For Department and FEA from Riefler and Lovitt. At meeting last night (Embassy’s 6096, July 3184) Keller accepted terms of our letter of July 15 (Embassy’s 5624, July 15).85
[Page 755]In meeting our demand for an “escape clause” lie stated that Swiss were now in a position to cancel their obligations under recent Swiss-German agreement on 4 weeks’ notice.
The Swiss reply bettered ceilings previously offered in two respects: M–6 ceiling for woodworking machinery is now reduced to 603,000 Swiss francs representing a reduction of one million Swiss francs under previous offer; item 1083/84 small arms ammunition is now reduced to 2,665,000 francs equal to 5% of 1942 for the last half of 1944 (instead of 10% as previously offered).
Delegation expressed extreme disappointment at our attitude regarding quotas for industrial raw materials. They referred to reductions in ceilings which they were making at our request and taken with respect to trade with Japan and transit through Switzerland and plead very earnestly that in consideration of all they had done we would permit them to export three of locomotives now and let them lift 3,000 tons of cotton and 1,000 tons of wool from Swiss-owned sources overseas.
Three locomotives referred to are three which have been completed and for which Swiss had previously asked permission to export during first half of 1944. If they were permitted to take cotton and wool they promised to introduce their previously offered restrictions on export of textiles and were willing to store these commodities at Lisbon pending our agreement to the opening of facilities for on carriage to Switzerland.
They agreed to credit these commodities against what we owed under Compensation Agreement. They stated that 6 additional tranches under Compensation Agreement are now available to United States Command [and?] indicated that they no longer expected scarce materials in return for anything which we might order under this agreement. (British are again inclined to attach considerable importance to Compensation Agreement because of renewed pressure from supply people who had recently expressed indifference.)
We questioned Keller on subject of gold clause. He stated that Swiss could not accept our gold clause but that Swiss National Bank would not accept gold from Germany unless Reichsbank assured them that gold offered was in fact gold.
We again impressed upon Keller desirability of establishing an air service from Switzerland and suggested that they could not now found on international law any objection to flights over Italy with agreement of Bonomi86 government with respect our second letter of July 15 (Embassy’s 5624, July 15). Delegation agreed in principle with position which we took and hoped shortly to give us satisfactory specific assurances to prevent export of substitutes for ball bearings. [Page 756] Technical side of this question is being investigated in Bern and Keller expects further information shortly.
We emphasized importance of transit representations which are being made in Bern and promised Swiss that we would give our reply to their proposals here as soon as possible.
This message was sent to Bern as Embassy’s 234, August 1, 8 p.m. [Riefler and Lovitt.]