Foreign Relations of the United States: Diplomatic Papers, 1943, Europe, Volume II

740.00112 European War 1939/9419

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

No. 11348

London, September 24, 1943.

Sir: I have the honor to refer to the Embassy’s telegram No. 6379, September 23, 9 p.m., and to transmit under cover of this despatch an original initialled copy of the note giving effect to the War Trade Agreement between the Governments of the United States, the United Kingdom, and Sweden. There is attached to this note the final texts of the various declarations and annexes which comprise the Agreement.

The note was initialled for the American Government by Mr. Winfield W. Riefler, Special Assistant to the Ambassador, with rank of Minister; for the Government of the United Kingdom by Lord Selborne, PC. Minister of Economic Warfare, and for the Royal Swedish Government by Mr. Bjorn Gustaf Prytz, the Swedish Minister in London.

Additional copies of the declarations and annexes thereto will be sent by airmail as soon as received.

Respectfully yours,

For the Ambassador:

James W. Riddleberger

First Secretary of Embassy

[Enclosure—Note Verbale]

Agreement Between the American, British, and Swedish Governments

His Majesty’s Government in the United Kingdom and the United States Government agree to the proposal of the Swedish Government that the Swedish Note of September 1st⁹⁴ and the present reply thereto should be considered as confirmation of the entry into force of the following documents:

(a) Declaration by His Majesty’s Government and two annexes. The texts of this Declaration⁹⁵ and annexes⁹⁶ are attached to the present Note Verbale.

(b) Declaration by the Government of the United States and two annexes.⁹⁶ The text of this Declaration is attached to the present Note Verbale. The two annexes are identical with those annexed to the Declaration by His Majesty’s Government.

(c) Declaration by the Royal Swedish Government and four annexes.⁹⁶ The texts of this Declaration and annexes are attached to the present Note Verbale.

(d) Exchanges of letters⁹⁷ concerning

(1) Machinery and railway trucks.

(2) Norwegian Relief.

(3) Statistics.

(4) Oil (three letters).

(5) Drugs.

(6) Ships.

2. It is perhaps appropriate to recall here that War Trade arrangements between His Majesty’s Government and the Royal Swedish Government were initiated in 1939 with the conclusion of the Anglo-Swedish War Trade Agreement of that year and have been continued on the basis of that Agreement, as subsequently amended and modified from time to time. The entry of the United States into the war made necessary a re-examination of that document in consultation with the United States Government and the Swedish Government. The documents specified under (a) and (b) of the preceding paragraph are the outcome of such re-examination and represent the policies and measures which His Majesty’s Government and the United States Government are prepared to make effective from now onwards and which will remain in force until the end of 1944. His Majesty’s Government and the United States Government are entering into the obligations in the above mentioned documents on the specific understanding that the satisfactory conclusion reached in the recent shipping negotiations will result in the immediate charter to the United States War Shipping Administration of certain Swedish vessels. The validity of the British and American Declarations and related documents depend of course on due effect being given to the Swedish Declaration and related documents specified under (c) of the preceding paragraph.

3. The policies and measures set forth in the above mentioned interrelated declarations and accompanying documents are based on the existing Anglo-Swedish War Trade arrangements, which are specifically recognised as remaining in full force and effect and binding on the signatories thereto.

London, September 23, 1943.

[Subenclosure 1]

Declaration by the Government of the United States

I. The United States Government regard the Anglo-Swedish War Trade Agreement of December, 1939, as amended and modified by agreements made in London in December 1941, including the special instructions to the Joint Standing Commission, and by the Swedish Declaration of today’s date, as remaining in full force and effect.

II. (1) Within the limitations of the Anglo-Swedish War Trade Agreement as amended and modified, the United States Government will do its utmost to ensure that goods of the types and in the quantities and subject to the conditions specified in Annex I to this Declaration, hereinafter called “basic rations,” shall actually be made available for importation into Sweden directly or indirectly by sea or by air, and where the source of a ration is stated to be neutral territory, the United States Government will extend all facilities open to it. If, however, for reasons beyond its control the goods in question cannot be obtained from an indicated neutral territory, the United States Government will do its utmost to offer an alternative source of supply in consultation with the Swedish Government. It is impossible to give an unconditional undertaking to make the goods available, since the supply position is liable materially to fluctuate in consequence of the exigencies of the war, but everything possible will be done by the United States Government to see that these supplies are available.

(2) If the supply situation in regard to scarce commodities whether specified in Annex I or not, should materially improve, the United States Government will be ready to examine with the Swedish Government whether any increase in or additions to the basic rations as fixed in Annex I will be possible.

(3) If the quantities actually made available during any basic period mentioned in Annex I should prove to be substantially below the basic rations, the United States Government will be ready to discuss with the Swedish Government the situation thus created and its possible bearing on the Declaration of the Swedish Government of today’s date.

(4) In cases where no purchasing arrangements are specified in Annex I the United States Government will inform the Swedish Government of the purchasing arrangements which it wishes to be observed.

III. (1) If the Gothenburg traffic is suspended by Germany, the United States Government will not object to the continuance by the Swedish Government of purchase and storage for future shipment of any commodity specified in Annex I to this Declaration to a total amount of either the quarterly basic ration or one quarter of the annual basic ration. The United States Government will be ready to discuss with the Swedish Government the question of any further Swedish purchases for storage.

(2) If, however, owing to the exceptional shortage of any individual commodity in the basic rations it is inadvisable to tie up in storage the amount indicated above, the United States Government will make arrangements acceptable to the Swedish Government to assure the immediate availability of supplies of the commodity in question for shipment to Sweden, in the event of the re-opening of the Gothenburg traffic. The conclusion of these arrangements will not be regarded as a ground for invoking section II paragraph 3 of this Declaration.

IV. (1) The United States Government understands that the Swedish Government will give information with respect to all purchases of goods enumerated in the list of basic rations or in previous British Schedules of Rations which are stored outside continental Europe or in Portugal for Swedish account.

(2) The United States Government understands further that in so far as these stocks are not needed for the fulfilment of the undertaking under Section II above or where a one-time shipment in full or in part cannot be agreed upon, the Swedish Government will upon request arrange for the sale of the goods either to the appropriate agency of the United States Government or to the appropriate agency of His Britannic Majesty’s Government, provided that the appropriate agency of the purchasing Government is prepared to pay for such goods to the full amount and in the currency originally paid by the Swedish owner, plus such storage and other carrying charges as may in the meantime have been incurred by the owner.

V. The number of Swedish ships nominated for and engaged in the Gothenburg traffic which are allowed to pass the Anglo-American controls will be limited to six per month, provided however that the United States Government will be prepared favourably to consider any application for a temporary increase, so long as the balance between eastward and westward bound ships is strictly observed, and the shipping arrangements of the United States Government are not interfered with.

VI. There will be no objection, subject to the provisions set out in Annex II, to the replacement of Swedish ships lost in the Gothenburg traffic in case the Swedish Government should deem such replacement necessary by the use of Swedish ships outside the Baltic on the understanding that the Swedish Government agree to exercise their right after consultation with the United States Government and His Britannic Majesty’s Government.

VII. Navicert quotas, within which basic rations will operate, will remain in existence, on the principles previously established. The navicert quotas will indicate the quantities of goods to the import of which there is normally no blockade objection, although supply considerations must govern the quantities actually authorised for import into Sweden from overseas.

June 30, 1943.

[Subenclosure 2]

Declaration by the Royal Swedish Government

I. The Royal Swedish Government regard the Anglo-Swedish War Trade Agreement of December 1939 as amended and modified by agreement made in London in December 1941, including the special instructions to the Joint Standing Commission, as remaining in full force and effect except as amended and modified in the following paragraphs.

II. (i) The Swedish Government will grant no further credits, direct or indirect, or extensions of credits already granted to Germany or associated countries and occupied territories, subject to the exception stated below. Guarantees of risk will be given by the Swedish Government only if they cover a warranty of transfer on clearing and payment of Swedish exports and do not exceed a thirty-day period.

(ii) In the case of Finland the Swedish Government reserve their right to allow extensions of the credits already granted, and in accordance with previous agreements to guarantee Finnish Treasury two or three year bills up to a nominal amount of 8 million kronor. In addition the Swedish Government reserve their right to grant new credits to Finland from the present date till the end of 1943 up to a limit of 8 million kronor. During 1944 new credits granted by the Swedish Government to Finland shall not exceed 10 million kronor.

(iii) The Swedish Government will not, as from the present date, enter into any further tripartite trade agreements affecting Finland.

III. The Swedish Government will not permit any reduction in the average price level of Swedish exports to Germany and associated countries and occupied territories, nor in the average price level of any group or any rubric specifically mentioned in Annex II, nor any increase in the average price level of goods imported from Germany and associated countries and occupied territories without corresponding increase in average prices of Swedish exports fully compensating the higher prices of imports.

IV. (i) Whenever possible until the end of 1943, the Swedish Government will, within the framework of existing obligations, take measures to reduce Swedish exports to Germany and associated countries and occupied territories and wherever possible within the framework of existing agreements take every step to limit such exports as far as possible.

(ii) New Commitments undertaken by the Swedish Government regarding 1943 and 1944 will be negotiated in accordance with the above principles.

(iii) In consequence of the Swedish refusal to grant further credits to Germany, and of Swedish insistence on the repayment by Germany of earlier credits amounting to 41.6 million kronor falling due in 1943, German imports of goods from Sweden in 1943 will be strictly kept within the limits of Germany’s capacity to export goods and Germany’s export of gold to Sweden. Swedish acquisitions of gold from Germany hereafter will be limited to gold belonging to the Reichsbank before September 1939 and will not exceed (a) 41 million kronor which the Sveriges Biksbank is committed to accept under the existing Agreement with the German Reichsbank; and (b) gold to pay the services on Swedish holdings of German securities.

(iv) The Swedish Government will reduce Swedish exports of goods in 1943 to all countries associated with or occupied by Germany, as compared with 1942 by not less than an amount equal to 130 million kronor, plus any Swedish net acquisitions of gold from Germany and associated countries and occupied territories in 1943. No gold will be accepted by Sweden which was not the property of the Central Bank of the exporting country before September 1939.

(v) The above-mentioned reductions will include

(a) A reduction in exports to Finland from approximately 80 million kronor in 1942 to approximately 80 million kronor in 1943.

(b) A reduction in exports to Denmark from approximately 110 million kronor in 1942 to approximately 70 million kronor in 1943.

(c) A reduction in exports to Italy from approximately 120 million kronor in 1942 to approximately 80 million kronor in 1943.

(d) A reduction in exports to Belgium and the Netherlands from approximately 42 million kronor in 1942 to approximately 28 million kronor in 1943.

(vi) As regards the remaining countries associated with or occupied by Germany or Italy the Swedish Government will, as stated above, take every step within the framework of existing Agreements to limit exports to these countries as far as possible.

(vii) Provided that German exports to Sweden are no greater in value in 1943 than in 1942 the above limitations will result in a reduction of the total value of Swedish exports to Germany and associated countries and occupied territories in 1943 to an amount not exceeding 860 million kronor.

V. The export from Sweden of certain commodities to Germany and associated countries and occupied territories shall be limited for 1943 as laid down in Annex I to this Declaration.

VI. As from January 1st, 1944:

(a) The export of iron ore from Sweden shall be limited to a maximum of 7.5 million tons annually in the proportion of not more than two tons of ore for every ton of coal or coke delivered from Germany and associated countries and occupied territories.

(b) The export of all ores from Sweden except iron ore, zinc ore and pyrites shall be prohibited. Exports of pyrites to Germany and associated countries and occupied territories shall, however, be limited to a maximum of 50,000 tons per annum in return for at least an equal amount of sulphur and/or pyrites from Norway. Similarly, exports of zinc ore to Germany and associated countries and occupied territories shall be limited to a maximum of 68,000 tons per annum in return for not less than 50% of the metal content of the zinc ore export.

(c) The export from Sweden of ferro-alloys shall be prohibited with the exception of ferro-silicon, exports of which shall be limited to a value of 5.3 million kronor annually.

(d) The export from Sweden of certain commodities shall be limited as laid down in Annex II of this Declaration.

VII. (i) The Swedish Government agree that the total value of Swedish exports to Germany and associated countries and occupied territories in 1944 shall not exceed 700 million kronor.

(ii) The total value of Swedish exports to Germany and associated countries and occupied territories in the first 6 months of 1944 shall generally bear the same relation to the total value of Swedish exports for the year 1944 as existed on the average during the corresponding periods of the five years 1938–1942.

VIII. Additions as specified in Annex III to this Declaration shall be made to List A attached to the Anglo-Swedish War Trade Agreement of December 1939.

IX. (i) The export from Sweden to Germany and associated countries and occupied territories of commodities specified in List B attached to the Anglo-Swedish War Trade Agreement of December 1939 shall not be permitted if they contain by value more than 12½% of “restricted commodities” inscribed on List A attached to the Anglo-Swedish War Trade Agreement of December 1939.

Notwithstanding this prohibition it is agreed that:

(a) Spare parts for machinery and apparatus already delivered and covered by List B, and insulated wires covered by rubric number 1873 may be exported up to the value of 500,000 kronor for the remainder of the year 1943 and of 1 million kronor annually thereafter.

(b) Existing Swedish commitments in 1943 for the export of other products specified in List B up to a total value of two million kronor may be carried out.

(c) The articles enumerated in List B may be exported to countries other than Germany and associated countries and occupied territories, even if they contain more than 12½% by value of restricted commodities.

(ii) The export to Poland of telephones and telephone equipment if containing more than 12½% by value of restricted commodities, shall be prohibited as from the present date.

X. When granting licences in respect of exports to neutral countries in Europe, the Swedish Government will make the condition that the goods will not be re-exported or used in the manufacture of goods to be exported.

XI. (i) The Swedish Government will prohibit the export of arms and ammunition, ships and other means of transport to Germany and associated countries and occupied territories. A broad definition shall be given to the term “means of transport” which shall include sleighs, skis, producer gas apparatus, locomotives, etc. An exception to this general prohibition will be made in the case of vessels now under construction in Sweden for German account, subject to the condition that no such vessel shall be delivered until Germany has fulfilled her correlated obligations regarding supply of ships plates for vessels now under construction or to be constructed in Sweden for Swedish account. These correlated obligations consist of delivery of 50,000 tons of ships’ plates annually during 1941, 1942 and 1943 by Germany for construction of Swedish ships plus delivery of plates needed for construction of ships for German account. Another exception to the above mentioned general prohibition will be made with regard to certain fishing vessels built in Sweden for German account and for which export licences have been promised.

(ii) Existing contracts with Finland up to a value of 1,910,218 kronor for the delivery of arms and ammunition, may be fulfilled provided that during any six months period the value of such exports to Finland is less than that of corresponding imports from Finland.

XII. (i) No vessel in the service of Germany and associated countries and occupied territories shall be repaired in Sweden, unless such repairs are in respect of damage incurred by such vessels (a) off the Swedish coast and salvaged by Swedish vessels or (b) sailing to or from a Swedish port.

(ii) A prohibition of repairs in Sweden shall also apply to all vehicles and other means of transport in the service of Germany and associated countries and occupied territories.

XIII. The Swedish Government will not allow any increase in the number of Swedish ships now engaged in the carriage of goods to and from Sweden and ports in Germany and associated countries and occupied territories or plying between ports in Germany and associated countries and occupied territories, or the replacement of any such ship lost, sunk, damaged or withdrawn.

XIV. (i) Each individual transaction involving the export from Sweden in exchange for war material, of metals and minerals or other commodities the export of which from Sweden is prohibited under List A of the Anglo-Swedish War Trade Agreement of 1939 as amended, will in future provide for the return to Sweden in the war material of the same amount of the metals, minerals or commodities in question.

(ii) Applications for the export from Sweden in exchange for war material of metals and minerals or other commodities the export of which from Sweden is prohibited under List A of the Anglo-Swedish War Trade Agreement of 1939 as amended, will be referred to his Britannic Majesty’s Government in the U.K. and to the United States Government for approval. An exception will be made for war material ordered by Sweden before June 1st 1943, and involving the export from Sweden of metals and minerals or other commodities the export of which from Sweden is prohibited under List A of the Anglo-Swedish War Trade Agreement of 1939 as amended provided that:

(a) the war material contains the same amount of the prohibited metals, minerals or other commodities as have been or will be exported from Sweden in exchange, except in the case of certain war material already ordered in Italy to a value not exceeding 15 million kronor;

(b) full particulars of such orders and exports are given to the Joint Standing Commission.

XV. Applications for the export from Sweden, in exchange for materials other than war material, of commodities the export of which from Sweden is prohibited under List A of the Anglo-Swedish War Trade Agreement of 1939 as amended, shall be referred for approval in each individual case to His Britannic Majesty’s Government and the United States Government in accordance with the arrangements made in 1941 with His Britannic Majesty’s Government. This provision shall apply equally to materials exported from Sweden for processing and return with the exception of tin and copper, in which two cases the previous approval of His Britannic Majesty’s Government and the United States Government will not be required.

The Swedish Government undertake that:

(a) the total amount of tin and copper exported from Sweden for processing and return in any period of 6 months shall not exceed 150 tons of tin and 600 tons of copper.

(b) tin and copper exported for this purpose will be returned to Sweden in full, less inevitable wastage involved by processing.

(c) full particulars of these transactions will be furnished to the Joint Standing Commission.

(d) the Swedish Government propose to export to Germany such balances of tin and copper respectively as may be found due to Germany after striking a balance in the Metal Clearing every six months. Full information in regard to these transactions will be made available to the Joint Standing Commission.

XVI. (i) Until such time as Sweden will be able to export freely to all countries in Latin America on an equal basis, the Swedish Government will limit Swedish exports to Argentina to paper, wood pulp for paper making, and rayon pulp and other commodities to be agreed upon, and only to such consignees as are approved in each instance by His Britannic Majesty’s Government and the United States Government, subject to the proviso that if the Argentine Government should take retaliatory action in the matter of exports to Sweden His Britannic Majesty’s Government and the United States Government will do their utmost to make the commodities which are involved available from elsewhere. Failing this, the two Governments will consult with the Swedish Government in order to reconsider the Swedish undertaking as regards limitation of exports to the specific commodities set forth above or later agreed upon with a view to re-establishing Swedish imports from the Argentine.

(ii) This undertaking shall not enter into effect until October 1st, 1943, except that from the present date the Swedish Government will not allow exports to firms or individuals in the Argentine inscribed on lists which will be communicated to them from time to time.

XVII. The Swedish Government agree to the establishment of a system under which applications for navicerts and export licences for the commodities listed in Annex IV shall be made in the first instance in Sweden, so as to enable the British and American Legations in Stockholm to satisfy themselves that these particular goods will not be utilised contrary to the interests of the two Governments. Under this new procedure applications will be made by the intending Swedish importers to the Swedish Government and the information contained in the applications will be communicated to the British and American Legations.

XVIII. Arrangements shall be made for checking all shipments of petroleum products arriving in Sweden through the Anglo-American blockade.

XIX. The Swedish Government agree that the United States Government shall have equal representation with themselves and with His Britannic Majesty’s Government on the Joint Standing Commission both in Stockholm and in London and that a Joint Standing Commission of similar composition and similar duties to the Commissions in Stockholm and London shall be appointed in Washington.

XX. Except where otherwise specified the provisions of the present Declaration shall come into effect on July 1st, 1943.

XXI. (i) In the preceding paragraphs the term “Germany and associated countries and occupied territories” is intended to mean Germany, Austria, Czechoslovakia, Jugoslavia, Poland, Hungary, Roumania, Bulgaria, Greece, Albania, Finland, Italy, France, Belgium, Holland, Luxemburg, Denmark, Norway, Estonia, Latvia, Lithuania, Occupied U.S.S.R.

(ii) If during 1943 or 1944 one or more of these countries should withdraw from their association with Germany or be liberated from German control, the foregoing provisions will require amendment, more especially as regards a proportionate reduction of Swedish exports to Germany and the remaining associated countries and occupied territories so that the remaining countries will not benefit from such withdrawal. In that contingency the British and American members of the Joint Standing Commission will arrange for a meeting of the Commission and will propose the necessary amendments.

30 June, 1943.

94. See telegram No. 5771, September 1, 8 p.m., from the Ambassador in the United Kingdom, p. 801.
95. This Declaration is the same, mutatis mutandis, as the Declaration by the Government of the United States, printed as subenclosure 1, infra.
96. Annexes not printed; they consisted of detailed lists of commodities and quantities.
96. Annexes not printed; they consisted of detailed lists of commodities and quantities.
96. Annexes not printed; they consisted of detailed lists of commodities and quantities.
97. Not printed.