740.00112 European War 1939/5939: Telegram

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

3719. Referring to your 3032, July 2, 8 p.m.

1.
The Swedes have told British Ministry of Economic Warfare from beginning nothing less than 15,000 tons additional per quarter would be of any use to enable them to maintain Government war reserve at what they regard as the proper figure. Since British private conversations heretofore have been on basis of 15,000 tons, to now attach new conditions and at the same time insist on allowing increase of only 10,000 tons is not likely to result in successful negotiations. Believe therefore British at most serious disadvantage in their trading unless authorized to go to 30,000 tons rather than 25,000 tons per quarter and they are requesting their Embassy to secure your consent to 15,000 tons additional quarterly.
2.
With respect to economic concessions (a) Ministry of Economic Warfare state that Swedish Government are ready to give assurance that no export of arsenic from Sweden to Germany is taking place under agreement in force and no such export is contemplated for the duration of the war; (b) British suggest asking that no further credit should be granted Germany beyond those stipulated in Swedish-German trade agreement of December last. Swedes absolutely refused [Page 346] straight Swedish Government credit of 300 to 500 million crowns for which Germans pressed violently and threatened to break off negotiations if it was not granted. They did, however, agree to guarantee to Swedish exporters under pre-war export credits scheme 20 to 30 percent of total purchase value of goods exported to Germany on credit. Amount involved is not clear but unlikely Swedes could or would denounce agreement now; (c) Sweden now prohibited under Anglo-Swedish war trade agreement from sending any foodstuffs to Finland; (d) British advise they have been pressing adequate export statistics in proper form and will now insist upon having them.
3.
With respect to military concessions (a) present limitation monthly 2500 tons each to Norway and Finland across Sweden. Swedes are willing to undertake and British will insist that there be no increase; (b) German air, naval and military personnel allowed to cross Sweden limited to personnel going on and returning from leave. British and we both question satisfactory check and control exists today and British are now trying work out schemes with Swedes; (c) The British have in writing from Swedes under date of July 2 “for reasons of principle and undertaking to furnish detailed statistics concerning the traffic through Sweden cannot be given to foreign powers. His Britannic Majesty’s Government, should, however, have no difficulties in following the general development of the situation. The Swedish authorities are prepared to furnish upon request such information as may be considered necessary from time to time”.
4.
Referring to your paragraph No. 5, question desirability of injecting at this time in negotiation that any commitment to supply petroleum products must be subject to revocation as circumstances seem to require since likely to make more difficult securing concessions and this point must be self-evident to Swedes.
5.
Anticipate no difficulty in securing Swedish Government assurances that 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 if circumstances require it of all stocks.
6.
Have no doubt understanding your paragraph No. 7 can be reached. However, it would seem to me that the combined Chiefs of Staffs would have to determine this formula. Figures on which British are working will follow by mail.
7.
Swedes as yet do not know German attitude regarding safe passage additional quantity but British would be assured before releasing. Present practice is to inform both British and German Governments of name and date of all ships sailing to Gothenberg and obtain their consent.
8.
Will keep you advised of progress negotiations and Ministry of Economic Warfare have been informed of foregoing. Ministry of Warfare wiring their Embassy and suggest you communicate substance this message to them.
Winant