662.6331/137

The Minister in Switzerland (Wilson) to the Secretary of State

No. 1981

Sir: I have the honor to report, in connection with the Department’s telegram No. 38, March 30, 1931, 5 p.m. and my reply thereto No. 45, April 7, 1931, 12 noon,7 that I had a conversation with Mr. Dinichert a few days ago which brought out in its general lines the attitude of Switzerland towards the proposed customs union between Germany and Austria. I was contemplating writing a despatch from memory of this conversation, but had desired to check it up more definitely.

Now, however, I find a leading article in the Journal de Genève of April 8th, of which I enclose a translation,8 setting forth the point of view of Switzerland so clearly that it is unnecessary for me to do more than transmit this document with the assurance to the Department that it meets in all respects the views which were given to me by Mr. Dinichert.

I invite attention particularly to the view therein expressed that, if the proposed union is a real customs union, the Swiss Government will feel that it has no right to demand like privileges under the most favored nation clause, especially since the treaties which Switzerland has negotiated since its customs union with Liechtenstein contain a provision excepting the operation of the most favored nation clause in the case of a customs union. Thus, the Swiss Government would seem to recognize that its only recourse will be the denunciation of existing treaties and the negotiation of new treaties if the facts, when known, justify such a course.

I also call attention to the fundamental policy of Switzerland which is touched on in this article, namely, their desire that no one of their [Page 580] great neighbors shall touch its territory on more than one frontier (the Swiss always speak of their four frontiers, French, German, Austrian and Italian), and their uneasiness at the possibility that the Austro-German union might bring about their envelopment on two frontiers by one of the great Powers.

There is every reason to suppose that the Swiss Government will await more detailed information as to the nature of this union before making up its mind to take any steps in regard to it. They will also, of course, await a more definite development of the attitude of the great Powers in this connection.

I have today had a conversation with Doctor Walter Stucki, Director of the Department of Public Economy and probably the most deeply versed of any one on this continent in the application of “most favored nation” clauses. Doctor Stucki is of the opinion that if there is a true customs union between Germany and Austria, Switzerland will have no ground for protest or for demanding the same privileges. But the weakness of certain Austrian industries is such that Doctor Stucki believes that it will be found essential to maintain a measure of protection for them against German competition to prevent their collapse. The resulting arrangement will then be a “preferential agreement” and not a real “customs Union”. If this is the case, Switzerland, according to Doctor Stucki, will make vigorous protest at its exclusion from similar preference.

Respectfully yours,

Hugh R. Wilson
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