File No. 658.119/357
The Secretary of State to the Ambassador in Great Britain ( Page )
7775. For Sheldon [from War Trade Board]:
No. 494. Referring further Embassy’s 9991, May 11, 11 a.m.,1 and 10003, May 11, 5 p.m., your 550 and 560. We are glad to learn Swedish negotiations will probably come to a head this week. Before approving of them please cable us what changes in shipping agreement have been made aside from the 400,000 tons of ships to be chartered on which we already have your cable.
We refer to the Swedish tonnage agreement which Fisher brought with him, draft proposed, dated January 21.2 What would be the basis of time-charter rates for Swedish tonnage employed outside war zone and what would be basis of insurance valuations? Has any reduction been made in clause 4 providing for 250,000 tons to be allowed to Sweden for her own trade between Sweden and United States, Great Britain and South America? We believe that it is very important to cut the amount of regular line tonnage allowed so as to leave that much more free for important trade.
We feel that clause 9 should be changed so as to provide that only full cargoes considered essential to the Argentine by Joint Body in London not to exceed about 25 per cent of the steamers to be allowed to proceed from Sweden to South America direct. The balance of Swedish liners, say 75 to 80 per cent, to come to the United States, loading cargoes here for South America such as may be designated by the United States. This is essential due to the shortage of tonnage for South America and to the fact that Sweden has not enough essential cargo to fill all tonnage going from Sweden to South America. Unless this clause is agreed to it would not justify free bunkering privileges.
It should be also specified that all goods shipped on the Swedish steamers direct to South America should be strictly of Swedish origin and also that lumber is not considered an essential.
United States and England have already cut exports on account of the shortage of tonnage and are only allowing essential commodities. The cable on rationing will follow. We are not in accord with proposed changes.