811.20 Defense (M)/6875b: Telegram
The Secretary of State to the Ambassador in the United Kingdom ( Winant )
2252. 1. On the basis of reports from the Embassy as well as telegrams received by the British Embassy in Washington from London on progress of the current negotiations with Switzerland, discussions have been held in the Department during the past few days on this subject. Participants have been, in addition to representatives of the various interested divisions of the Department, members of the Board of Economic Warfare and representatives from the British Embassy.
2. Complete agreement was reached by all present on the objectives of the current joint negotiations with Switzerland defined as follows: (a) to help to maintain Swiss political independence, thereby retaining the non-economic advantages currently held; (b) to reduce Swiss economic assistance to the Axis; (c) to obtain additional valuable supplies for the U.K. and the U.S.; (d) to arrive at financial agreements which will result in the U.K. and U.S. obtaining sufficient Swiss francs for necessary expenditures within Switzerland without unduly benefiting the enemy in the process.
3. The Department and the Board of Economic Warfare recognize the danger of threatening reduction in present food quotas, if use of this weapon were attempted as a general bargaining measure. The recommendation is made, however, that careful consideration in London should be given to the employment of this threat for the specific purpose of obtaining engagements from Switzerland to reduce to token quantities Swiss exports to Germany of food products such as fruits, fats, oils, dairy products and cattle etc. Obviously it is essential to reduce such Swiss exports to the Axis to the lowest possible level. It is recognized that careful consideration undoubtedly has already been given to this point in London, but it is the request of the Department and the BEW that it be re-examined.
4. The Department’s understanding of the negotiating procedure to be employed in London is as given below, and on the assumption that its understanding is substantially correct, the Department approves this procedure: (a) The existing blockade policy of passing foodstuffs but prohibiting raw materials will remain in force with due regard to the point made by the Department in paragraph 3 above and (b) below. This appears to be the basic support for the maintenance of Swiss independence. (b) The Swiss will be offered a re-opening of certain quotas for raw materials which are not in short supply with the U.K. and the U.S., but such increased quotas as may [Page 387] be granted will not be accompanied by any guarantee of fulfillment of their requirements. (c) Financial discussions are being conducted in London between the British and the Swiss and in Washington between this Government and the Swiss. The Department proposes to discuss with the British Embassy and the U.S. Treasury the position of both Governments vis-à-vis the Swiss on financial matters. On the basis of these discussions a coordinated program will be prepared for presentation to the Swiss. When this program has been prepared, it will be transmitted to you in detail for dovetailing with the general negotiations. (d) The question of increased trade interchange between the U.K. and the U.S. on the one hand and Switzerland on the other will be negotiated somewhat in the nature of an independent subject. These discussions will be on a comprehensive basis, and the various materials considered with proposed amounts will be submitted for consideration to the Combined Raw Materials Board, the amount and character of materials which might be released being controlled by the amount and importance of the goods which the Swiss would be prepared to make available to the U.K. and the U.S. The Department reserves its decision on the suggestion that special consideration might be given to the requirements of the Swiss Army for raw materials, if during the course of negotiations consideration of this point becomes advisable.
5. The Department requests that not only should the Embassy keep it fully informed of all important developments during the process of negotiations, but also that the substance of every important clause in the proposed comprehensive agreement with Switzerland be telegraphed as this agreement reaches tentative final form.
6. The Department understands that Riefler of the Board of Economic Warfare and other representatives of the Embassy have been attending the Swiss negotiations as observers. It is the request of both the Department and the Board of Economic Warfare that the necessary steps be taken to assure their full participation in these negotiations in the future.
7. Please inform Riefler of the contents of this telegram.