Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume V

740.00112A European War, 1939/19800: Telegram

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

London, November 2, 1942—5 p.m.
[Received 10 p.m.]

6128. Reference to the Department’s telegram No. A–138, October 10, respecting continuance of war trade lists after the war. The Department’s comment on the British proposal has been presented to Ministry of Economic Warfare and exhaustively discussed with its officials. The cogency of the Department’s views is realized and we are assured that no hasty action will be taken here or indeed any announcement made of this character without American concurrence. The Ministry of Economic Warfare, however, attaches such importance to this proposal that it requests a renewed examination of the problem in the light of the following observations:

(1) The proposed policy would not be directed against any neutral country in particular but against listed firms and individuals in neutral countries who continue to trade with or otherwise assist the enemy. In executing this policy consideration can continue to be given to the economic interests of neutral countries. Consequently it is believed that we could combat any contention that this policy would represent punitive or discriminatory measures against neutral countries as such inasmuch as any announcement would refer solely to listed firms or persons.

(2) Compensating advantages of such an announcement particularly with respect to European neutrals are in London believed to outweigh the disadvantages cited in Department’s A–138. We discussed at some length with Ministry of Economic Warfare the alternative suggestion set forth in the final paragraph of this airgram but the opinion here is that such a method would not be an effective deterrent. Furthermore, the British contend that present developments are such as to warrant action of the nature proposed. They are strongly of the opinion that the moment has come to sharpen this weapon of economic warfare and that the proposed action would have a salutary effect in Switzerland, Sweden and Portugal. The British missions in Bern and Lisbon are strongly in favor of a public announcement and have stressed that the same effect could not be achieved by informal or unofficial warnings. In Switzerland the Ministry of Economic Warfare believes that the listing policy is at the moment effective in reducing the exportation of fuses to Germany and has indications that the Germans in their effort to obtain as large as possible quantity of fuses from Switzerland have agreed to permit certain additional Swiss exports to us if a relaxation of the listing policy against firms working on Axis orders can be obtained. It has furthermore been brought out in the current negotiations with the Swiss²² that many firms are anxious to avoid listing even when not particularly vulnerable. Consequently an increased effectiveness of the threat of listing in the next few moments [months] is considered to be of great value.

(3) In respect of Latin America the British argue that as the proposal is directed principally against firms and individuals who assist the enemy and not against any particular countries an announcement would not, therefore, be confined to any country or group of countries. It is immaterial to the Ministry what publicity would be given in that region and it would agree to confine local publicity to European neutrals. It is believed here, however, that it would not be possible to make public this distinction in any official announcement.

(4) Ministry of Economic Warfare cabled its Embassy in Washington under date of October 16 a proposed statement on this matter which has doubtless been communicated to the Department. The Ministry emphasizes that it is not wedded to this particular phraseology and it would welcome any suggestions on our part. For example, it was suggested that the statement might be amplified by the addition of a phrase making it clear that we are merely reserving the right to take such action. We would thereby not be committed to enforcing it fully.

(5) Reverting to the question of the relative merit of a public announcement versus informal and unofficial statements by listing authorities the Ministry believes that if the latter method were adopted it is inevitable once rumors commenced to circulate in neutral countries that a question would be ask[ed] in the House which would have to be answered. Such question would place the whole matter on a publicly defensive plane and would thereby weaken the whole plan.

(6) Ministry of Economic Warfare is informing the British Embassy in Washington.

Winant

22. See Foreign Relations, 1942, vol. iii, pp. 376 ff. For the official British account, see Medlicott, The Economic Blockade, vol. ii, pp. 219–235.