550.S1 Washington/742

Memorandum by Mr. Richard W. Morin, of the Division of Western European Affairs, of a Conversation Between American and Swedish Representatives, May 17, 193355
[Extract]
Present: The Secretary of State,
The Swedish Minister,56
The Counselor of the Swedish Legation,57
The Swedish Economic Attaché,
Mr. Steinhardt,
Dr. Feis, (acting as spokesman),
Mr. Moffat,
Mr. Culbertson,
Mr. Wiley.

Dr. Feis introduced the discussion by saying that he wished to present a brief report on the scope of our previous conversations concerning the Monetary and Economic Conference with the representatives of other governments. Following this he would be pleased to receive such suggestions or opinions as the Swedish delegation wished to suggest.

. . . . . . . . . . . . . .

The Swedish Minister stated that he did not understand the necessity of the American gold embargo in view of his impression that the amount of American obligations held abroad, if all paid in gold, would not have severely taxed the gold reserve. Dr. Feis explained that there were several factors in the question and that it was not only a matter of foreign holdings of American securities, Government bond, etc., but there had been the probability of a flight from the dollar by Americans as well as a speculative problem. Mr. Steinhardt indicated that at the time of the gold embargo Americans were considering the sending of large quantities of bonds abroad for collection. The threat in short was primarily from Americans. The Minister then asked concerning the reaction of other governments consulted with regard to the stabilization of currencies. Dr. Feis replied that the discussions had been left in the air but the situation, now summarized, may be said to rest entirely on Great Britain. The Swedish Minister stated that his country was interested in this question inasmuch as it maintained a [Page 567]managed currency. It had appointed experts to follow the situation and would like any information regarding the conversations which had been held with respect to the rates of stabilization. Dr. Feis replied that he was not the person from whom to obtain this information. The Swedish Minister then referred to the matter of tariff rates and reciprocal tariffs, and stated that he was pleased to hear the American position with respect to the unconditional most-favored-nation clause. Dr. Feis stated that we would probably adhere to this policy unless the other nations moved in the opposite direction. The Swedish Minister then put the question as to whether Sweden, in the absence of a most-favored-nation treaty with United States, would obtain most-favored-nation treatment from the United States concerning the products which were mentioned in a most-favored-nation treaty between the United States and some third nation. Dr. Feis replied that while he was unable to give an authoritative opinion on this, Sweden, as a low tariff country, would probably receive most-favored-nation treatment in the instance cited though no treaty existed. The Swedish Minister was interested in this statement as he had been apprehensive as to the outcome in the absence of a treaty and had considered the possibility of pushing a conclusion of a treaty with the United States but that now, as a result of the comments which had been made, he would hold the matter in abeyance until the powers which the President was seeking had been granted. Here Dr. Feis asked the Swedish Commercial Attache to explain carefully to his Government the American aim in connection with silver, particularly the point that no system of bimetallism was contemplated, to which the Commercial Attache agreed. The Minister then suggested that once currency stabilization was reached the quota system would disappear. Dr. Feis stated that there was always difficulty to get rid of any trade barrier once established and that benefited industries would be extremely averse to return to their former situation.

  1. Approved by the Assistant Economic Adviser (Livesey).
  2. Wollmar F. Boström.
  3. Baron Johan Beck-Friis.