740.00112 European War 1939/6711: Telegram
The Minister in Switzerland (Harrison) to the Secretary of State
[Received September 19—4:23 p.m.]
4281. Department’s 2169, September 12. Regarding question raised in numbered paragraph 2 Department’s telegram it will be recalled that my 4145, September 1022 indicated that amount of 7,500,000 francs was total for a period of 4 months. My British colleague states amount of $600,000 covering items in British-American compensation request was to be a unique transaction but not for a specified period. I should appreciate being informed whether this is correct or whether a time limit also was envisaged in British-American proposal, as Department’s question suggests that our request was for a fixed period.
Numbered paragraph 3 of Department’s telegram. At Mixed Commission meeting September 11 Commercial Attaché23 requested a copy of text of condition imposed by Germans. This the Swiss officials refused to give. The Commercial Attaché then asked for more precise details and interpretation. The reply given by a Swiss member of Commission was that Germans asked that we discontinue our pressure on Swiss firms aimed at getting them to refuse munitions contracts or not to manufacture beyond specified amounts.
On Wednesday24 Commercial Attaché and British Commercial Counselor called on Dr. Hotz, Director Division of Commerce, in effort to ascertain whether there was foundation for reports received that a leading German fuse manufacturer recently visited a number of Swiss firms presumably to place new or enlarged contracts for fuses and to indicate that, if such contracts were being placed while the compensation proposal is under consideration, failure on part of Swiss Government to forbid acceptance of new contracts at this time might seriously jeopardize Berlin protocol and the negotiations in London.
It was pointed out to the Swiss official that signing of new contracts now would undoubtedly be interpreted as either (1) a move on part of Germans to build up level of production before our signing of an agreement with the Swiss containing a maximum munitions delivery clause and or (2) a proof that Germans interpret the “condition” clause as giving them a free hand to extend munitions contracts in Switzerland. Dr. Hotz replied that in his opinion reported visit of German manufacturer was probably a normal business trip but that he would make further inquiry specifically through the President of [Page 400] the Watch Association and would inform us of his findings. This he has not done as yet. Meanwhile further investigation of this German industrialist’s visit appears to indicate that his visit was made in the middle and end of August and that he was not successful in obtaining new or enlarged contracts. During this discussion with Dr. Hotz Commercial Attaché again requested a copy of text of German condition and was again told that the transmission of the text was incompatible with Swiss policy. Commercial Attaché then pointed out to Dr. Hotz that it was unreasonable to expect American and British Governments to enter into this compensation agreement without knowing fully what condition had been imposed by Germans and that obviously our Governments could not agree to refrain from taking actions which were not clearly defined even were an agreement reached in London with regard to a maximum limitation on Swiss deliveries of munitions to the Axis. It was pointed out to Dr. Hotz that both the Department and Ministry of Economic Warfare naturally had made further inquiries as to the definition and interpretation of this German condition and that Swiss would readily understand that until a formal statement to this condition was forthcoming our Governments could scarcely be expected to give serious consideration to the compensation proposal. To this Dr. Hotz replied that he would send in writing a paraphrase of the conditions as transmitted to Swiss Legation, London.
This has now been received, under date of September 17, reading as follows in translation:
“During our discussion yesterday you expressed the wish to be informed in writing with regard to the conditions to which Germany has subordinated the granting of facilities accorded within the sphere of the counter blockade. Reverting to my oral statements, I confirm to you that Germany has laid down in this connection the stipulation that the representatives of the United States and of Great Britain refrain from interfering with the Swiss firms for the purpose of engaging them not to execute German or Italian orders or to accept no more such orders.”
In my opinion, in which my British colleague concurs, that acceptance of this condition and in such terms is dependent upon a guarantee by the Swiss to fix a maximum limit of their munitions deliveries to the Axis with, if possible, a gradual reduction; if such an agreement is reached, pressure by us on individual firms will, of course, become unnecessary. In connection with the proposal to fix such a limit, I should appreciate being advised as to the basis upon which this limitation would be established, the total amount involved, and whether an over-all maximum with limitations by categories is envisaged.
Repeated to London.