740.00112 European War 1939/5938a: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Winant)

3032. Reference Department’s No. 2642, June 10.19

Representatives of the State Department, Board of Economic Warfare and the British Embassy met on June 29 and July 1 to consider the Swedish oil position. It was decided to recommend that discussions be carried on with a view to ascertaining what concessions can be secured from the Swedish Government if we increase the quota to 25,000 tons quarterly.
Two classes of concessions are suggested. The first class is economic and consists of the following: (a) The unconditional continuation of the prohibition by the Swedish Government of the export of arsenic; (b) assurances from the Swedish Government that the present clearing balance in favor of Sweden in its trade with Germany will not be increased; (c) a cessation or a sharp reduction of food exports from Sweden to Finland; and (d) the furnishing of prompt and detailed statistics of future exports of all products including food stuffs and textiles.
The second category of concessions is military and consists of the following: (a) limitation to definite figures of quantities of war material to be allowed to cross Sweden on German account; (b) similar limitation and if possible reduction of the figures of German military, naval and air personnel allowed to cross Sweden; and (c) full and periodic statistics of German personnel and material crossing through Sweden.
It is realized that all of these concessions may not be obtainable by virtue of the increase of the oil quota quarterly to 25,000 tons. If an additional quota increase is necessary to win all or a substantial part of these concessions we will then be prepared to discuss such further increase in petroleum shipments.
It must be a part of the understanding that any commitment to supply petroleum products must be subject to revocation at any time any circumstances seem to require it.
Further, assurances must be obtained from the Swedish Government that the petroleum products will be utilized solely for military purposes and will be adequately guarded against seizure and that adequate measures will be taken to enable prompt destruction of all stocks if circumstances require it.
If broad agreement is reached, we would expect specific understanding on maximum stocks and consumption after institution of such program. Such maximum stocks would be a limiting factor in addition to any quota limit.
If information available please advise what assurance Sweden has received from Germany relative safe passage of oil shipments. It is not, however, suggested that London should be asked to ask for any further commitments from Germany at this time.
Please send frequent detailed reports of the progress of your negotiations so that we may have ample time for considering proposals before final signature.
A telegram similar to this is being sent by the British Embassy to the Ministry of Economic Warfare.
Please inform Walden20 and Blockade Committee.
  1. Not printed.
  2. George S. Walden, Attaché in the United Kingdom.