File No. 658.119/91
The Minister in Sweden ( Morris) to the Secretary of State
[Received November 12, 9.50 a.m.]
971. For Lansing:
I have just had a conference with Hellner, Foreign Minister of the newly appointed Liberal-Socialist Government. In this conference he asked me to inform you in a general way of the desire of the new Government to come to some arrangement between Sweden and the Allies. He outlined basis upon which Sweden would be willing to initiate negotiations looking to the consummation of an agreement with the Allies. I do not think that the basis as outlined is final with the Swedish Government and I believe that further concessions particularly as to tonnage might be obtained. I did not express any opinion to Hellner during the conference as to how our Government would feel or how they would entertain these matters which he discussed but I told him that I would immediately cable same to you. He desired to state that the Swedish Government wishes to appoint two commissioners empowered to negotiate on this arrangement and confidentially suggested to me that they would be Mr. Marcus Wallenberg, president of the Enskilda Bank, and Mr. Carl Carlson, an influential steamship man. He wishes to know whether it would be the desire of our Government to meet in London or in Washington regarding these negotiations and when. In either event he stated it would be his intention to have the present commissioners, who are now in America, remain in Washington for the time being.
I have learned from my British colleague that his Government have wired their Ambassador in Washington to try to have these negotiations carried on from London, claiming that London is more central and easier of access to handle these matters. The Foreign Minister had a similar conference with the British Minister who has cabled his Government likewise. Therefore, I request a reply to give the Foreign Minister as to your disposition regarding carrying on these negotiations, and at what place and when.
The British and French Ministers and myself have conferred upon this matter and we are all in accord that now is an opportune time for these negotiations, and we furthermore feel that it is highly probable a beneficial arrangement can be made with this [Page 1062] present Government who are kindly disposed toward the Allies. We feel that if no arrangement is made with this Government it is probable that they will continue becoming more intimate with and closer to Germany both commercially and otherwise. In a conversation with Foreign Minister he confirmed to me that Sweden had purchased from Germany three thousand tons of lubricating oil. Also he inquired of British Minister whether it would prejudice Sweden’s cause with the Allies if Sweden accept from Germany grain and other supplies. My colleagues and myself feel that the points which they bring out for discussion in making an arrangement, which basis I quote below, are entirely different from anything which the Swedish Government have been willing to make up to the present time. It is so encouraging that we feel quite sanguine that some mutually satisfactory arrangement now can be made. I also wish to draw Department’s attention to my telegram 9471 showing the bitter feeling being developed in Sweden due primarily to the embargo. Allied Ministers and myself are of the opinion, as I telegraphed previously, that it is not feasible nor practicable for Sweden entirely to discontinue trading with Germany and that it would be a mistake to ask her to do so and my colleagues have telegraphed their Governments in this light. As an example, if Sweden were compelled to entirely discontinue trading with Germany they would be unable to get coal from England except in very limited amounts. Should Sweden be cut off from obtaining coal from Germany you can readily see the natural results which would ensue to Sweden’s economic life and how it would affect their industrial life as well as transportation. From what I learn and also my conversation with Hellner it seems that the Swedish Government is of the opinion that it is America particularly who wishes to stop Sweden’s trading with Germany. In the opinion of myself and Allied colleagues no time should be lost in arranging to meet the Swedish delegates for a conference on these matters. The following is the basis Hellner informed me they would be willing to adopt to start negotiations with Allies, Sweden of course to receive certain goods for home consumption in return for which the following arrangements might be considered:
- (1)
- Swedish Government to give assurances:
- (a)
- Against reexporting to enemy of goods imported or products of such goods, and of goods made with the assistance of goods imported from the Allies, for example, by factories using British coal;
- (b)
- Against exports of Swedish goods similar to those imported, for example, export to Germany of Swedish pork while Sweden received American pork.
- (2)
- Transit: Hellner asked if this question could be satisfactorily settled by assurance on the part of Swedish Government that they would grant transit licenses freely without direct compensation. He explained that Swedish Government preferred not to abolish present system by which export prohibitions applied to transit goods as well as goods of Swedish origin. My opinion is that if prohibition of export was raised as regards transit goods we should have far greater difficulty in controlling transit traffic and deviations would be much more frequent. Hellner said that the Swedish Government would have to make exceptions as regards free grant of transit licenses in the case of goods of which there was great lack in Sweden and which for embargoes or other reasons Sweden could not import. Export of arms and ammunition would of course continue to be prohibited.
- (3)
- Shipping arrangement: All Swedish vessels which are employed in inland, coastwise, or Baltic trade to be excluded from agreement. Of the remaining tonnage a quantity sufficient to carry imports for Sweden’s own needs to be set apart for Swedish trade exclusively, the rest being permitted by the Swedish Government to trade in Allied interests.
- (4)
- Respecting exports of iron ore and metals to Germany: Minister for Foreign Affairs stated that the Swedish Government could not possibly agree to complete stoppage of such exports. They were prepared to go a considerable way to meet all our wishes but the question was a most important one and required careful consideration.