740.00112 European War 1939/9292: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Winant)
5637. For Economic Warfare Division. Reference Embassy’s 5770, 5771 and 5772 of September 1, 5831 of September 3 and your 6066, September 13.91 For your information, Department and OEW are [Page 803] anxious to facilitate conclusion of the agreement with Sweden as rapidly as possible. Therefore, we suggest that no amendments should be made to the agreement now, but that it be signed as it stands. The questions raised by the Swedish memorandum of September 1 can be left without prejudice to subsequent discussion in the Joint Standing Commission. We suggest that you discuss with MEW presentation of a note along the following lines:
The U.S. Government and HM Government take note of the Swedish Government’s memorandum of September 192 expressing its willingness to conclude the agreement drafted in London, as amended by Mr. Riefler’s letter of July 9 and as supplemented by the declaration made regarding Sweden’s relations with other Nordic countries.
With reference to the observations made by the Swedish Government in its memorandum of September 1 on several provisions of the Agreement, the U.S. Government and HM Government feel that it would be more practicable to have the Agreement signed in its present form, leaving the points raised therein for consideration by the Joint Standing Commission at an early meeting. However, in order that the Swedish Government may be apprised in advance of the views of the U.S. Government and HM Government on these points, the following observations are made:
- 1.
- That the ceiling established for exports of commodities in group 15 is not to be exceeded (Comment: We agree with you that a firm stand should be taken with the Swedes on this point. You might indicate to them that the present ceiling of 220 million kronor is substantially in excess of 1942 exports and that this additional leeway was agreed to by us to take care of both existing commitments and of price increases. We cannot, therefore, agree to a further increase.)
- 2.
- That discussions will be permitted in the Joint Standing Commission for interpretation of the Swedish commitments regarding gold acquisition, provided it is understood that no modification will be made of the undertaking which will in any way violate the commitment whereby Swedish exports to Germany and associated countries and occupied territories are to be paid for without credit or gold transfers except those specifically permitted in the agreement.
- 3.
- That where payment for Swedish exports to Denmark and Finland is to be made from the German or other clearings, the case will be brought in advance before the Joint Standing Commission for approval. It should be understood that permission for such payment cannot be granted if it would involve credits or gold transfers not permitted in the agreement.
- 4.
- That full details will be given to the Joint Standing Commission regarding the Swedish shipbuilding agreement with Germany for 1941, 1942, and 1943; and that our assumption is correct that no vessels will be delivered to Germany and associated countries and occupied territories under this agreement subsequent to December 31, 1943, except those to which Germany is entitled by virtue of her performance of these agreements before December 31, 1943. It is also understood that no extension of this agreement will be made enabling its operation after December 31, 1943.
- 5.
- That the export of bearings from Sweden to Germany and associated countries and occupied territories shall be limited by the separate rubrics indicated in the draft agreement, except that a margin of not more than 10 percent may be allowed in each rubric provided that the total value remains within the total limitation for the three rubrics.
- 6.
- That if no agreement can be reached on negotiated sales of Swedish stocks in accordance with Section 4 (Paragraph 2) of the U.K. and U.S. declaration, the Swedish Government will be free to dispose of such goods only if they are located in territories outside of control of HM Government or the U.S. Government (Comment: It might be pointed out in this connection that the U.S. Government cannot give up its undoubted right to requisition, as provided by pertinent laws and regulations, but this Government hopes that the right would have to be exercised only in exceptional cases. The Swedes should also be reminded that price control measures established by the U.S. Government, in a long run benefit the Swedish Government by enabling them to make their purchases at a stabilized low price level.)