War Trade Board Files: Switzerland, Shipping and Tonnage, Austrian Ships in Spanish Waters, Vol. II
The Chairman of the War Trade Board ( McCormick ) to the Counselor of the British Embassy ( Crawford )
My Dear Sir Richard : I am in receipt of Mr. Hudson’s letter of September 14 inclosing a paraphrase of a telegram received by you from the Foreign Office regarding tonnage for Switzerland. The War Trade Board have given very careful consideration to this telegram, and I can perhaps best present the views of the Board by taking up seriatim the points mentioned in this telegram.
1. With reference to the importance of enemy vessels remaining in the Dutch East Indies as a pledge of Germany’s good behavior toward Holland, it may be noted that there is no question of the purchase of more than a small percentage of such tonnage. The greater part thereof would remain under Dutch control. In any case, we seriously doubt whether the ships would be as useful as a pledge of good behavior by Germany as they would be actually operating in service to which the Associated Governments must otherwise have to allocate shipping of their own.
2. The foregoing view applies to a considerable extent to the point lettered “A” in the Foreign Office telegram dealing with the possible purchase of ships in Spain. Of course, if the Spanish Government will not permit of the transfer of such ships to Switzerland, nothing can be done. To make an effort, however, might at least lead Spain to take more prompt and effective action than she otherwise would.
3. We have never in the past hesitated to bargain with Germany for her ships in neutral ports and we are not aware that any bad effect has been created thereby. As you know, we are at present negotiating for enemy ships in Chile, and until very recently the Italian Government with, we understand, the approval of the British Government has been negotiating for enemy ships in Spain.
4. If, as suggested in paragraph “C”, Germany would refuse to permit the sale of ships, that is, of course, the final disposition of the matter, but unless we know definitely that this will be Germany’s position, the possibility that she will refuse does not constitute in itself a reason for not attempting to secure the ships.
[Page 1646]5. It is true that if Germany does charter the vessels to Switzerland, she would realize important sums of money. We feel, however, that the need for ships is such that it is practically beyond price. It would, of course, be important, as already recognized, that adequate provision be made for the disposition of charter money in a neutral bank, where it would, at least to an extent, be impounded for the period of the war.
6. The length of time which might be required to repair enemy ships is, of course, a factor which must be taken into consideration. It would seem probable, however, that from among the sixty-odd German and Austrian ships in Spanish waters, including the Canaries, a few could be found which could be put into service in less time than six months.
7. We have always understood that were enemy ships put into use they would be navigated under a neutral flag and with neutral crews, so that there would be no greater delay entailed in supervising such ships than in the case of other neutral ships which Switzerland has for some time past been employing.
8. There has come to our attention a letter from Mr. Leverton Harris with reference to this same matter which suggests an argument against permitting Switzerland to charter enemy ships, which argument is not alluded to in the cable from the Foreign Office which you enclosed, but which we think perhaps should be referred to by us. This letter states that the present tonnage situation, while still critical, is not such as to justify the recognition, in the case of enemy vessels, of any transfer of flag which might tend to impair any policy which may be adopted by the Allied Governments in regard to the period following the conclusion of the war, and that it may prove more advantageous to keep enemy vessels in port in an unseaworthy condition, rather than to allow them to be utilized now and thereby facilitate their resumption of trade in Germany’s interest on the conclusion of the war.
I feel confident that Mr. Leverton Harris cannot have meant to imply that the tonnage situation is for the near future less critical than it has been in the past. My own information appears to me to be conclusive to the effect that if the present military program of the United States is to be carried out, the shipping situation will be, if anything, more acute than has yet been the case during the course of the War. Furthermore, the War Trade Board feel most emphatically that consideration of post-war trade should not be allowed in any way to interfere with acquisition of the tonnage which may contribute substantially toward bringing the war to a successful and prompt termination.
[Page 1647]9. The War Trade Board is in general accord with the view of the Foreign Office as to the tonnage requirements of Switzerland and with the Foreign Office estimate of 120,000 tons deadweight, permitting of the import of approximately 50,000 tons of goods a month. We are also in full accord with the view of the Foreign Office that the Associated Governments must undertake a positive responsibility to place tonnage at the disposal of Switzerland. The relative responsibility to be assumed by the United States, Great Britain and France, as suggested by the Foreign Office, seems to the War Trade Board equitable, although it would desire to give this particular question further study.
10. It is felt that substantial compensation should be secured from Switzerland in consideration of the Associated Governments assuring to Switzerland shipping facilities. Such compensation should, we feel, be in the form of permits to export from Switzerland commodities, such as lumber, required by the Associated Governments and the opening of credits to assist the Associated Governments in making purchases in Switzerland. It is the hope of the War Trade Board that these matters can be adjusted in the negotiations shortly to be opened for a new agreement to replace the agreement between Switzerland and the War Trade Board, which expires on September 30, and the War Trade Board would be happy to receive detailed statements as to the commodities and financial arrangements which the British Government would desire to have stipulated for in this new agreement.
I am [etc.]