Papers Relating to the Foreign Relations of the United States, 1917, Supplement 2, The World War, Volume II

File No. 654.119/84, 90

The Chairman of the War Trade Board ( McCormick) to the Secretary of State

Washington, December 20, 1917.
[Received December 21.]

Dear Mr. Secretary: I enclose herewith a memorandum between the War Trade Board and the Swiss Government in regard to exports from the United States to Switzerland, which was signed by Cailler, Roussy and Heer for the Swiss Government and myself as chairman of the War Trade Board, in Paris, December 5, 1917.²

Yours very truly,

Vance C. McCormick

[Enclosure]

Memorandum of December 5, 1917, between the War Trade Board and the Swiss Government in Regard to Exports from the United States to Switzerland³

The War Trade Board, an administrative agency empowered by Executive order of the President of the United States to license exports in certain cases, and the Swiss Minister, Mr. H. Sulzer, have considered the requirements of Switzerland for exports from the United States for the twelve months beginning October 1, 1917, and ending September 30, 1918. In order to set forth in definite form a statement of the quantities of such exports from the United States to Switzerland for which licenses may be granted by the said War Trade Board, and the conditions, rules, and regulations, under and in accordance with which such export licenses may be issued, it is hereby stated and declared:

I

1. It is the desire of said War Trade Board that Switzerland shall receive the maximum requirements of the several articles, commodities, material, and substances hereinafter enumerated in the several schedules annexed in so far as (1) the same are not required for consumption in the United States and Allied countries¹ and (2) will not, if their exportation is permitted, directly or indirectly benefit any country or ally of any country with which United States is at war.

2. The statement of said War Trade Board in regard to issuing licenses, and the allotment of the designated quantities of the several articles, commodities, material, and substances as set forth in the annexed schedules A, B, C, D, E, F, G, H, and within the limits of the contingents are not intended and shall not be held and construed to constitute an agreement or contract on the part of the United States with the Swiss Government; but shall be held, construed, and regarded as a declaration merely of the domestic or internal administrative action of the said board pertaining to the licensing of shipments from the United States. Said board does not assume the power or authority to make contracts or agreements binding upon the Government of the United States, nor does it assume to deal in regard to the policy of the United States relating to foreign affairs.

II

The granting of licenses for the exportation from the United States to Switzerland of the quantities of articles, commodities, material, and substances as set forth in the several schedules attached is conditioned upon the undertaking of the Swiss Government to fulfill faithfully and observe each of the following stipulations and conditions:

1. It is stipulated and understood that the distribution of any and all articles, commodities, material, and substances described in the next schedule shall be subject to the condition that such distribution must in every case be authorized by and shall be made pursuant to the rules and statutes of the Société Suisse de Surveillance Economique hereinafter designated as S. S. S. Such articles, commodities, material, and substances shall in no event be delivered to agents, dealers, or purchasers in greater quantities than can be accounted for by the genuine requirements of stipulated Swiss consumption.

2. That full information shall be given to any accredited representative of the United States with respect to any distribution or delivery made or proposed to be made of the articles, commodities, material, and substances dealt with hereunder. If any question shall arise as to such distribution, it is agreed that the Swiss Government will give any such accredited representative of the United States full information on the subject, which will include the production of any such books or documentary evidence as bears thereon. And at the request of any such accredited representative of the United States, the Swiss Government will furnish full particulars in regard to the enforcement of the Swiss prohibitions and regulations concerning exports from Switzerland and will afford every facility within its power and co-operate in any inquiry concerning the effective enforcement of such prohibition, regulations and restrictions.

3. The articles, commodities, material, and substances for which export licenses shall be granted pursuant to the stipulations herein contained are based upon the estimated total requirements of Switzerland for the period mentioned, and since the same are to be withdrawn from the already restricted supplies in the United States, it is especially stipulated that if Switzerland is able to obtain elsewhere supplies of the same goods of American origin, the amounts thus elsewhere obtained shall be subtracted from the quantities set forth in the schedules annexed.

4. The right is reserved to determine the distribution of the allotments for export both as to time and port of sailing, but due consideration shall be given to any requests or representations of the Swiss Government that may be made in regard to the most advantageous use by the Swiss Government of vessels under Swiss charter and employed in the ocean carriage of such articles, commodities, material, and substances.

This article does not apply to the allotment of grains (Schedule B) concerning which special arrangements are made below.

5. The Swiss Government obligates itself to transport at the actual cost of such transportation from any port or ports of the United States that may be designated, 1,000 tons of cargo each month destined for the American Red Cross in Switzerland (prisoners of war), it being understood that these cargoes shall not absorb more than 5 per cent of the monthly tonnage available for Switzerland in United States ports.

6. In the event the Swiss Government shall be unable to secure adequate ocean tonnage facilities to transport her supplies from this country, such aid shall be extended in securing additional tonnage facilities of neutral ownership as may be possible, consistent with the tonnage requirements of the United States and Allied Governments.

7. The Swiss Government recognizes that it is undesirable that vessels under Swiss charter should proceed in ballast or only partially loaded to a United States port. Spanish vessels chartered by the Swiss Government to carry cargoes to France destined for the Swiss Government shall, when westward bound,¹ whenever possible, carry cargoes consisting in whole or in part of pyrites from Spain. In the event other acceptable cargo is available, such other cargo may be substituted. The Swiss Government will co-operate in every way that lies within its power in order that all vessels inward bound to the United States shall carry full cargo.

8. It is further expressly stipulated that any articles, commodities, material or substances which may be in transit, or which may have arrived at any port in France from the United States, shall not until such time as this memorandum shall finally become effective, pass beyond such French ports in the course of transportation to Switzerland. Any export license in the meantime issued for such above-mentioned articles, commodities, material or substances from the United States, whether so² recited therein or not, shall be subject to the conditions expressed in this paragraph. Cargoes licensed from the first day of October, 1917, and until this agreement becomes effective, shall provisorily remain in the custody of the French Government or its representatives until released by them for final transportation to their destination in Switzerland.

9. That the importation into Switzerland of the articles, commodities, material, and substances herein mentioned is for consumption in Switzerland, and the amounts and quantities³ thereof (notwithstanding the maximum quantities stated in the schedules A, B, C, D, E, F, G⁴) shall at all times be limited by the genuine internal requirements of Switzerland, with due regard to the importation into Switzerland from other countries than the United States of articles, commodities, material, and substances capable of use as substitutes for those described in the annexed schedules.

10. That except as set forth hereinafter, none of the articles, commodities, material, or substances imported from the United States and no product, by-product, or waste and no alloy, compound, or ingredient thereof, shall, subject only to specific exceptions hereinafter designated, be directly or indirectly consigned or exported to, or used for the benefit or advantage of Germany, Austria-Hungary, Bulgaria or Turkey.

11. The following exceptions applying to (a) countries, and allies of countries at war with the United States and (b) neutral European countries, are made:

(a) The undertaking of the Swiss Government in regard to prohibitions and restrictions against exports from Switzerland and of countries and allies of countries at war with the United States shall be subject to the following and no other exceptions:

The prohibitions of exports shall not apply to articles manufactured in Switzerland and included within the category of articles specified in article 10, paragraphs (a) and (c) 1, 2, 3, 7, 8, 9, 10, 11, 12, 13 of the [by-laws of the] S.S.S. subject always to any modifications which may subsequently be made.

Further, the prohibition of exports shall not apply to the quantities of copper, the export of which is allowed as an integral part of machines, in virtue of article 12 of the by-laws of the S.S.S. in its present form as modified by the agreement of March 20, 1917, between the Allied Governments and Switzerland; nor to the metal of which the export is allowed as a perfectionnement traffic in conformity with article 13 of said by-laws.

In accordance with the provisions of article 10(c) of the S.S.S. by-laws the right is always reserved to open negotiations with the Swiss Government with the object of introducing in the provisions of the above-mentioned articles of the by-laws such modifications as may tend to ensure a limitation of the quantities of goods authorized for export to the countries at war with the Allies.

(b) Subject to the condition that the export of articles, commodities, material or substances to neutral European countries through any country or ally of country at war with the United States shall in no event be permitted, except by special arrangement or agreement, the undertaking of the Swiss Government to prohibit exports shall not apply to cotton goods wholly manufactured in Switzerland from American cotton and exported to Holland, Denmark, Norway, Sweden or other neutral European countries, provided allotments have been made by this board to meet the requirements of such neutral countries. But in all cases exports from Switzerland, exports from the United States and from any other neutral country shall be added together to determine whether the total allotment made by this board has been exceeded. Full information shall be given from time to time upon request of the quantities so exported from Switzerland.

Such re-export of articles so manufactured in Switzerland from material imported into Switzerland from the United States shall be made only to the neutral countries herein mentioned and provided that the manufactured articles so exported from Switzerland shall be consumed in the neutral country to which they are exported. In estimating the quantity required by any neutral including Switzerland, the quantity imported by such neutral from other neutral countries importing from the United States will in every case be subtracted from the amounts allotted by the War Trade Board.

III

In consideration of the foregoing stipulations and conditions and subject to the approval of the French Government of the plan and arrangements herein expressed, said War Trade Board hereby makes the following declaration of policy in regard to granting export licenses to meet the requirements of Switzerland, and hereby establishes the rules and regulations which shall govern the issuance of licenses from the United States of articles, commodities, material and substances described in the annexed schedules.

If quantities equal to those set forth in said annexed schedules are not deemed available for exportation from the United States at the designated time or times at which licenses for the export thereof shall be requested, according to the policy and rules and regulations of the said board as herein declared, then licenses shall be granted for as great a proportion thereof as are available for export, consistent with the policy herein declared. The maximum quantities for which such licenses shall be issued are calculated upon the ascertained requirements for Swiss consumption as specified in said annexed schedules.

Considerations shall be given to any application for license to export to Switzerland articles not specified in said schedules, and if such are not now, and now and shall not hereafter be placed upon general embargo, it shall be the policy of the said board to issue such licenses in due course, subject always to all other conditions hereof, and to the internal requirements of the United States, and the policy of the said board in respect to such exports.

Because of the better information possessed by the representatives of the French Government this trade agreement¹ shall not become effective until it shall receive the formal approval of the French Government.²

Schedules Showing Quantity of Ascertained Requirements

explanatory note

1. Wherever definite quantities of the requirements as set forth in the following schedules are not stated, but the expressions “by agreement,” or “to be determined,” or “as may be determined,” or other equivalent form of expression is appended, it is understood that no declaration of policy is made by said board and no rule or regulation is established in regard to the quantity for which license will be issued. The quantities shall in each such instance be hereafter determined in the ordinary routine consideration for export licenses.

2. Wherever the statement of the quantity in the annexed schedules is recited to be “subject to British guaranty” it is understood that no declaration of policy is made or rule or regulation is established by the board in respect to licensing such exports except conditioned upon favorable recommendation by the British Government.

3. Special conditions and provisions are hereinafter stated in particular instances modifying the declaration of policy and rules and regulations. But said special conditions and provisions shall be limited to the specific articles, commodities, material or substances to which they refer.

4. The quantities indicated in the following schedules refer to the allotments agreed to by United States and form part of the total rations made to the S. S. S. by the Allied Governments. Nothing in this agreement shall be considered as being in contradiction with the present or future S. S. S. rations.

Schedule A—Metals

Articles		Metric tons
Antimony		52
Antimony sulphide		80
Copper—sheets, filing, pipes, wire, etc. (none from Japan)		10,000
Copper, fabricated		800
Copper sulphate		2,500
Lead		2,000
Iron sheets, galvanized, etc., except tin less than 3 mm. thick		6,000
Iron sheet between 3 mm. and ⅜ inch		7,000
Steel forgings, machines, machine parts, without prejudice to arrangements already made by the Allies		Special
Aluminum sulphate		2,000
Round steel bars, hot rolled, forged	By	agreement
Square steel bars “ “ “	“	“
Seamless tubing, exclusive boiler tubes, welded tubing, lap and butt-welded pipes	“	“
Watch cases, raw and finished	“	“
Agricultural small tools, Metric tons		800

The allotments of the articles in this schedule are subject to the following express conditions, in addition to the conditions hereinbefore set forth and applicable to all schedules.

1. Allotments of steel forgings may be made only after special application in case of each export for which license is asked.

2. None of the machines, forgings or machine parts for which export licenses may be granted, shall be employed either directly or indirectly in the manufacture of arms or parts thereof, ammunitions, gunpowder, or explosives of any kind destined for export to a country or ally of a country at war with the United States.

Schedule B—Grains

Articles	Metric tons
Wheat and rye	300,000
Oats	120,000
Barley	31,500
Corn	140,000
Malt	30,000
Oatmeal, semolina, etc	3,500
Flour	2,500
Grass seed, etc	1,100
Linseed	2,000
Oil-cake and oil-seed meal	46,000

The following special conditions apply to the articles in this schedule.

In addition to the general conditions applicable to all schedules, the following conditions shall apply to grains licensed for export to Switzerland.

1. From December 1, 1917, until September 1, 1918, in accordance with a proposal adopted at the recent meeting of the Section of Revictualling of the Inter-Allied Conference, Switzerland is to receive a guaranteed allotment of 240,000 tons of cereal bread-stuffs (¾ to ⅔s of which to consist of wheat).

This allotment is, if possible, to be shipped to the port of Cette and to be supplied under the same conditions as the cereal bread-stuff supplied to the Allies. These supplies are to be transported on Allied ships or on ships supplied to Switzerland by the Allies for this purpose, subject to an arrangement made or to be made between the Wheat Executive and the Inter-Allied Chartering Executive. This stipulation is not to be considered as in any way affecting the existing arrangements under which the Swiss Government agrees to charter neutral ships for Swiss services through the intermediary of the International Chartering Executive.

It is understood that the fourth or the third of the above-mentioned allotment of 240,000 tons of cereal bread-stuff which may consist of other than wheat, is not to be deducted from the allotments above mentioned.

2. Shipments of grain are to be distributed as evenly as possible throughout the year. Said shipments not to begin prior to November 15, 1917.

3. All purchases of grain other than wheat made in the United States for export to Switzerland shall be made from the grain corporation in the department of the Food Administrator of the United States and vessels engaged in carrying such tonnage shall receive such grain at any Atlantic or Gulf coast port that may be designated by said grain corporation.

4. It is specifically stipulated and declared by the Swiss Government that the imports of grain, food-stuffs or feeding-stuffs in this schedule described shall in no event operate to release any grains, feeding-stuffs, or food-stuffs of Swiss origin, or now contained in Swiss stocks for export from Switzerland to any of the following countries: Germany, Austria-Hungary, Bulgaria, Turkey, Holland, Denmark, Norway and Sweden.

5. The issuance of license for export from the United States to Switzerland of oil-cake and oil-seed meal shall be subject to the proviso that the existing agreement between the Swiss Government and the Governments of Great Britain and France respecting the supply of condensed milk from Switzerland shall be fully carried out.

6. Considering that, the existing stocks of cereal bread-stuffs in Switzerland will be completely depleted by February of the coming year, considering the time required under present conditions for the transportation of supplies from American ports to Switzerland, a minimum quantity of 30,000 tons of bread grain (to be deducted from the 240,000 guaranteed tons) is to be shipped by the competent organs in the course of the month of December, 1917, without prejudice to the origin of these products.

Schedule C—Mineral Oils, etc.

Articles	Metric tons
Crude oil, kerosene, gasoline, including 10,500 tons benzene	75,000
Paraffin, vaseline, etc	1,500
Lubricating oils	20,000
Nitro-benzene, napthol and its derivatives (for the use of the Swiss Government)	Up to 300
Bituman	1,200

The Swiss Government expressly guarantees that none of the substances, articles, commodities, and material mentioned in this schedule shall be used directly or indirectly in the manufacture of arms or parts thereof, gunpowder, ammunitions, explosives, projectiles, and war materials in general destined for export from Switzerland to any country or ally of any country at war with the United States.

Schedule D—Sugar

Articles	Metric tons
Sugar	60,000

The Swiss Government agrees and undertakes to make its purchases of sugar in the western hemisphere through the Food Administrator of the United States in accordance with the regulations of said Food Administrator and from such ports as he may designate. It is understood that the contracts for sugar already made in Brazil can be executed without the intervention of the said Food Administrator. If so determined by the Food Administrator a part of the allotment herein provided for shall be obtained by the Swiss Government from Java.

Schedule E—Leather

Articles	Metric tons
Raw hides, all kinds	800
Tanned hides	20
Sole leather	2,000
Leather for uppers	1,000
Leather for harness	150
Leather belting	30
Saddle leather and metal parts	50
Shoes and parts in rubber, leather, etc	1,000

It is expressly stipulated and guaranteed by the Swiss Government that the export from¹ Switzerland shall be prohibited of leather or rubber, shoes, boots, slippers and parts thereof, soles, uppers, harness and parts thereof, saddles and parts thereof, and raw hides or prepared leather, to Germany, Austria-Hungary, Bulgaria, or Turkey.

Schedule F—Cotton

Articles	Metric tons
Cotton (as cotton or cotton goods)	18,000

The Swiss Government expressly declares and guarantees that it will prohibit the exportation to Germany, Austria-Hungary, Turkey, or Bulgaria, of all American cotton, including raw cotton, cotton linters, cotton waste, and all cotton goods and fabric containing cotton in any proportion, and of all goods and articles manufactured from cotton.

This declaration shall not apply at present to the goods specified in article 10 (c), paragraphs 4 and 6, of the by-laws of the S. S. S. In accordance with article 10(c) of the S. S. S. by-laws the right is always reserved to open negotiations with the Swiss Government with the object of examining (aided by American experts) the possibility of modifying the provisions of said article 10(c), paragraphs 4 and 6, in conformity with the exigencies of the war.

Schedule G—Fats

Articles	Metric tons
Edible fats	8,000
Cottonseed oil and other edible oils	8,000
Linseed oil	2,000
Fatty acids	1,400
Tankage grease and bone fat	1,400
Fatty acids for soap, oleine	1,400
Beeswax	25

All purchases in the United States by the Swiss Government of fats must be made through the Food Administrator of the United States, or in accordance with instructions, recommendations, or regulations of the Food Administrator.

Where fats or oleaginous substances of any kind are required for use in Switzerland for any purpose for which palm oil may be a substitute, then the allotment herein referred to may be reduced by specifying the quantities of such palm oil which may be obtained by Switzerland from the African west coast.

Schedule H—Articles Not Included in the Above Groups

Articles	M.T.	Remarks
Alcohol, absolute		Subject to approval of Munitions Board
Coal and wood tar	50
Canned vegetables	75
Poultry, not over	2,500	As may be determined
Dried fruits	2,000
Tobacco	8,700
Jute	1,200	Subject to British guaranty
Jute thread	300	“ “ “ “
Starch, industrial, fecula. etc	5,100
Turpantine	1,600
Celluloid	60	To be obtained in the United States if not from France
Sporting arms and ammunition	47
Miners’ wicks, lamp	100
Acetic acid, lactic acid, pyridin bases, etc., up to	1,300	Acetone excluded
Bromine and iodine for pharmaceutical use up to	69
Bicycles and automobiles		Occasional orders
Sausage casings, except beef casings, etc., up to	600
Feathers, fowl	300
Telegraph and telephone equipment	100
Machines for agriculture	1,540
Pure rubber, up to	270	To be obtained from Great Britain
Articles of rubber, including toys, erasers, suspenders, garters, etc	110	To be obtained in the United States1 if it cannot be delivered from France. Contingent upon receiving permit from Great Britain for rubber, quantities according to agreement.
Automobile tires	110	For Federal Army only
Sashes and doors		To be determined
Cabinet lumber		To be determined
Raw furs, domestic		By agreement
Kodak films, up to	300
Dental and other special apparatus		By agreement
Asbestos	1,000
Tanning materials	1,000
Binding twine	1,000
Sisal
Chemical products for pharmaceutical use	160	By agreement
Oil and wax cloth	20
Liquid and solid extract for dyeing purposes	400
Hair felt	50
Denatured formaldehyde	300

• United States of America:
  • War Trade Board
    Vance C. McCormick, Chairman
• Switzerland:
  • A. Cailler
  • Grobet-Roussy
  • Heer

December 5, 1917.

[Annex—Translation]

The French Minister of Blockade and of the Liberated Regions ( Lebrun) to the American Delegation at Paris

S. G. E.

Paris, December 5, 1917.

Memorandum between the War Trade Board and Switzerland

I have taken note of the text of the “memorandum between the War Trade Board and the Swiss Government relating to exports from the United States to destinations in Switzerland which must be authorized by the said War Trade Board.”

The text of this document as it has been established in the conferences which have lately taken place, first among the Allied delegates, and later with the Swiss delegates, is in complete harmony with the various existing arrangements with Switzerland and calls for no remarks from me.

I have, therefore, the honor of informing you that I give it the formal approval of the French Government, as is required in the last paragraph of Section III of this agreement.

I congratulate myself heartily on having been able thus to take part in the conclusion of an arrangement which marks so happily the participation of the United States in the economic negotiations made necessary by present circumstances.

A. Lebrun

2. For a brief narrative of the negotiation of this agreement, see Mr. McCormick’s report to Colonel House, Vol. I, p. 400.
3. Certain corrections, indicated as errata in the War Trade Board print of this agreement, have been made herein. The phrases as they appear in the original document are given in the footnotes which follow.
1. Original reads “their allies.”
1. The phrase “when westward bound” not in original.
2. Original reads “or”.
3. Original reads “qualities”.
4. Original reads “H”.
1. Original reads “that this trade agreement.”
2. The letter of the French Minister of Blockade approving the agreement is printed as an annex hereto, post, p. 1196.
1. Original reads “that in consideration of the grant of licenses for the quantities in this schedule set forth, the export from.”
1. Original reads “To be obtained here.”