862.51/3817: Telegram

The Chargé in Switzerland (Riggs) to the Secretary of State

6. Department’s 9, January 22, 4 p.m. I discussed the matter this morning with Motta, Federal Council in charge of the Political Department. He said he would immediately refer it to Federal Council and added that latter would certainly carefully weigh and consider the comments of a friendly nation such as the United States. He said that the Swiss Government was practically compelled to press for a measure of this kind in view of Switzerland’s disastrous trade balance with Germany amounting to an adverse balance of some 380,000,000 francs in 1932, a load which a small country could not carry. Regarding point 1 he was skeptical as to willingness of Dutch Government to forego its agreement and remarked that it had possibly maneuvered in an attempt to place the burden of refusal on Swiss shoulders. He also emphasized contention that Netherlands could better afford to renounce agreement since Dutch holdings are considerably smaller than Swiss. He was very guarded in his comment on the remaining points but he touched upon what is probably an important angle of the matter from the Swiss point of view when he said that Switzerland has with Germany an agreement to avoid double taxation which it had with great difficulty induced Germany to ratify and also a commercial arrangement both of which will fail if discriminatory transfer arrangement is not continued. He conveyed the impression that Switzerland is fighting for its economic existence and that it must bear possible consequences rather than forego the important benefit which this agreement provides. He said that decision as to renewal would not be reached until end of present month.

At his request I have sent him an informal memorandum covering substance of the points presented.