File No. 658.119/576

The Chargé in Sweden ( Whitehouse ) to the Secretary of State

[Telegram]

2694. On August 20 Mr. Marcus Wallenberg at the request of Swedish prime Minister informed British Minister of the following:

The Swedish Government made a coal arrangement with the German Government in April, to continue till the end of September, by which certain articles whose export is Prohibited by the London agreement were to be exported to Germany. Under this arrangement Sweden was to receive 150,000 tons of coal monthly and in return was to give monthly export licenses for 25 tons impregnated canvas and 50 tons animal hair, as well as certain ores and slags. Wallenberg explained that the impregnated canvas belonged to stocks which Germans had held in the country for a considerable time past, while the animal hair was of Swedish origin. Further they were to give licenses for 3,500,000 kroner worth of wood pulp, amounting to about 100,000 tons, up to October 1, and for 3,000,000 kroner worth of spinning paper, amounting to about 27,690 tons, of which 14,000 tons was exported up to the beginning of August. About 6,000 tons of other paper has also been exported during the same period. The [Page 1282] Swedish Government now desire to export in compensation for coal received the balance of the spinning paper, making in all 27,690 tons, and to spread this remainder out over a period of a further six months until April 1, 1919.

The pulp exported [until] now under coal arrangement is already in excess of the quarterly amounts fixed by London agreement,1 but the yearly export may in the opinion of the Swedish Government be brought within limits so fixed by also spreading the remainder over a further six months.

Mr. Wallenberg, on behalf of the Swedish Government, expressed the hope that such an arrangement with reference to the pulp and spinning paper would meet with the requirements of Associated Governments and that the export of these goods could thus be arranged so as to fit in with the London agreement. As regards the exports of canvas and hair, Mr. Wallenberg referred to letters 19 and 20 [9 and 10 2] attached to London agreement which were exchanged between himself and Commander Harris and according to which certain licenses [were] already granted Germany for goods to be given in compensation for goods received from Germany. Mr. Wallenberg informed him officially of an arrangement also made in April between the Storakopparberg Company, of which he is chairman, and the German Government for the export of 40,000 tons pyrites annually to Germany in return for coal and coke required by the company. License for the whole 40,000 tons had been granted in April by the Swedish Government but Mr. Wallenberg said that he had [not] been informed of this in London or he would certainly have communicated it to the Allied negotiations and endeavored to secure a settlement.

Twenty-five thousand tons of these pyrites had been exported to Germany from the beginning of May up to now, but the Swedish Government would give assurances that this export would now altogether cease, although this would mean a very serious loss to the company which would hardly be able to carry out work at their iron foundries without German coke. Though chairman of the company, he had thought it his duty to urge on the Swedish Government the cessation of this export so as not to produce a conflict with the London agreement.

Mr. Wallenberg promised to hand British Minister a memorandum which was received yesterday and of which the following is a summary:

Owing to prolonged negotiations in London it was impossible for Swedish Government to curtail export to Germany of several articles merely on a presumption that proposed agreement might contain restrictions in regard to such export. Before conclusion of the agreement [Page 1283] the Swedish delegates in London strongly emphasized the difficulties which would arise during the first months after the agreement came into operation, as contracts would have been made and licenses granted with the sanction of the Swedish Government. It is especially the coal agreements with Germany which bind Sweden to deliver various articles and make it impossible for her to fulfill strictly the agreement of May 29, before several months reorganization elapsed.

According to article 13 of the agreement, the export to the Central Powers of pulp and paper is limited with a further restriction that “the quantity of each in any one quarter shall not be greater than the quantity of each which has been exported in the corresponding quarter of 1917.” As regards pulp, the figures for the quarter June to August, 1917, are so low that it will be absolutely essential to combine them with the figures of the next quarter in order to be able to fulfill the contracts made with Germany. It would greatly help Sweden if henceforth the restrictions of paper and pulp exports could be calculated half yearly instead of quarterly.

Sweden would also desire to be entitled to make sulphite and sulphate interchangeable with the restriction that the stipulated quantity of sulphate will not be exceeded.

Concerning paper, quarterly exports in 1917 are more equally divided, but in order to be able to fulfill previous arrangement with Germany, Sweden desires the half yearly instead of quarterly calculation, and the same applies to the reduction of textile rations.

Under the general agreement exportation of pyrites to Central Powers is prohibited. The memorandum then refers to the Storakopparberg contract with Germany for 40,000 tons of pyrites, and states that after the agreement was ratified the Government informed the company that the export of pyrites must cease. The Swedish Government has granted the export of in all 25,000 tons of pyrites of which about 18,000 tons were shipped before the ratification of the agreement, and the company now desires to fulfill the whole contract and export 15,000 tons more, pointing out the disastrous position in which it will be [placed] by not receiving German coals in the future, as the company cannot be run on English coal, the price being prohibitive.

In order to comply with arrangements made in connection with delivery of coal and in compensation for other articles already obtained, Sweden has to send to Germany articles, a list is here given, of which following are the most important items: manganese ore 2,500 tons, cinders 6,950 tons, sulphuric acid 15 tons, matte containing 7 per cent of copper and 7 per cent of nickel, 150 tons. Copy to London.

Whitehouse
  1. Ante, p. 1240.
  2. Ante, pp. 1272, 1273.