740.00112 European War 1939/8524: Telegram

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

3537. For Department and BEW.

(1)
Swiss Minister here presented on May 20 a memorandum to MEW respecting the compensation deal and stated that Geleitscheine had already been issued in a total of 188,000 Swiss francs but as MEW had agreed to issue navicerts for 2000 tons of oats the balance was slightly in our favor. The Minister then expressed the hope that this would not prevent the compensation deal from working smoothly and that it would be kept separate from other issues between the Allies and Switzerland. Foot25 of MEW replied that this would require consideration in consultation with the Americans but his initial reaction was that the compensation deal should be kept entirely separate from other matters and that it might well continue even if otherwise agreement was not reached.
(2)
Foot continued in stating that there was one difficulty arising from the compensation deal. In order to get it under way it was agreed late in 1942 to refrain for a time from putting further pressure on firms manufacturing arms and machinery. We had now kept this self-denying rule for a much longer time than was originally envisaged and the position therefore was that we had denied ourselves one method available to us to reduce objectionable exports while receiving no satisfactory assurance from the Swiss Government. We could not accept this situation much longer and unless arrangements were made for the reduction in the immediate future of undesirable exports we should be obliged to resume pressure irrespective of its effect on the compensation deal.
(3)
In response to the Swiss Minister’s inquiry respecting the delivery of the notes in Bern, he was told that while their delivery had been deferred pending his interviews with Eden, the notes would now probably be delivered but their contents would not come as a surprise to the Swiss Government. Foot emphasized that our attitude towards Switzerland was no different from that adopted for other neutral countries. It was realized that in the early stages of the war the Axis possessed a powerful sanction in that it could invade with an apparently invincible army. Now, however, while this danger might not be entirely removed it seemed improbable that Germany would wish to [Page 840] add to its enemies or its military commitments. Moreover, as the German war potential declined the value of the contributions made by neutral countries was becoming relatively and rapidly greater. In these circumstances, the British Government felt itself justified in expecting the neutrals to make a substantial reduction in their assistance to the Axis war effort and it would be most unfortunate if the Swiss Government chose this moment to increase its assistance to the enemy.
(4)
The Swiss Minister then called attention to a paragraph of his memorandum on the compensation deal in which it is suggested that new items might be included and that the Swiss Government, without giving a definite assurance, would be prepared to try to include supply facilities for fuses if desired by the Allies. He stated that if the Allies obtained Swiss fuses there would be fewer left for the Germans. Foot replied that this did not necessarily follow inasmuch as it might simply result in an increased output. If, however, we could by purchases reduce deliveries to the enemy we would be deeply interested.
(5)
The Swiss Minister then called attention to certain cargoes of sugar, copra and tobacco now awaiting shipment in vessels scheduled to sail about May 25.
(7) [(6)]
Swiss Minister’s remarks as reported above cover stance [substance] of his memorandum which follows by air mail.26
Winant
  1. Dingle Foot, Parliamentary Secretary of British Ministry of Economic Warfare.
  2. Despatch No. 9277, May 26, 1943, from the Ambassador in the United Kingdom, not printed.