740.00112 European War 1939/8454: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Winant)
3225. Your 3372, May 15, and your 3338, May 13. In connection with the statements made by Hägglöf, it is suggested that you point out the following at an appropriate time in the negotiations:
1. When the statistical mission was in Stockholm and asked about Sweden’s commitments for exports to enemy Europe they do not seem to have been told of any promise to export to Germany certain quantities of paper and wood pulp on condition that during the first half [Page 774] of the year Germany delivered 2 million tons of coke and coal. In any case, Hägglöf does not indicate that the promised deliveries of paper and wood pulp would exceed the ceilings proposed. With regard to iron ore, there may now be no provision limiting deliveries in the agreement with Germany but we are proposing that the Swedes restrict such deliveries on their own initiative. Presumably this would not violate any agreement made with Germany. With regard to other commodities, Hägglöf does not show that the exports allegedly promised to Germany would exceed the ceilings we propose, and where they do the Swedish Government should be able by intervention with the private firms to have them take the onus of refusing orders. We understand that this already has been done in some cases on the excuse that Swedish rearmament requires the increased use of plant facilities. Even if Hägglöf’s statements about commitments to enemy Europe are confirmed by his “detailed statistics” we believe there is some suspicion that these commitments may be exaggerated by him since they were not mentioned in Stockholm and since with regard to some of them the export and import quotas would appear to be price agreements rather than guarantees of delivery.
Moreover, Hägglöf might be reminded that whatever agreements have been made by Sweden which violate the present war trade agreement cannot be made the basis for the objection that we are trying to upset Sweden’s treaty obligations.
In view of the above, we are unable to accept the proposition made by Hägglöf whereby there would be no reduction in exports during the last half of this year.
2. With regard to your views as to the best bargain attainable, we believe that the agreement you outline could be approved here subject to the following comments:
- a.
- There should be a specific provision for a reduction in Swedish exports of iron ore along the lines of your original formula and this should apply to the current year.
- b.
- The reduction of 20 to 25 percent in total Swedish exports during the second half of this year as compared with the same period in 1942 might be satisfactory if an individual rubric basis were used and the most important commodity exports were adequately reduced. Do you propose to accomplish this reduction on the basis of the ceilings determined by reference to 1938 exports as you originally outlined or are you suggesting a different formula? It will be difficult here to obtain acceptance of a 6 month 20 to 25 percent reduction (which on an annual basis for 1943 will be a 10 to 12 percent reduction) unless it can be shown that items such as prefabricated houses, ball bearings, machinery, etc., are very drastically reduced, as they were by your original formula.
- c.
- The exception made for Finland in the case of credits might be satisfactory for the current year, but we should like to limit credits in 1944 to those growing out of the triangular arrangements with [Page 775] Denmark. If this is impossible, it might be possible to accept credits to Finland in 1944 to no greater extent than have already been granted in 1943. You should not press for these concessions at the expense of others of value of more interest to us.