740.00112 European War 1939/8755: Telegram

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

3988, Your 4181, June 24. For Riefler.

1.
Department and BEW agree that the Swiss proposals constitute an adequate basis for resuming negotiations in London on the war trade agreement.
2.
According to our information, the Swiss in making these proposals did not request the lifting of the ban on import facilities preliminarily to the resumption of negotiations of the war trade agreement in London. If we now lift this ban it may deprive us of one of our principal bargaining points in the London negotiations. On the other hand there are distinct advantages in getting a definite commitment from the Swiss before they reach an agreement with the Germans. If you feel that such a commitment cannot be obtained without offering to lift the ban on import facilities, Department and BEW approve your suggested course of action.
3.
If under all the circumstances you consider it desirable to offer to lift the ban, it should be made clear to the Swiss that we will expect them to meet our position more adequately in the London negotiations. The Swiss should not get the impression that their present proposals are acceptable to us as final commitments. The proposed reductions of undesirable exports by “weight” do not appear to produce as advantageous results as the various formulae proposed by us last year. The credit arrangement discussed in Bern’s 3750 June 2340 (repeated to London) is objectionable in that the Government’s guarantee in effect merely substitutes the credit of the Swiss Government for the credit of German coal exporters. Without such a guarantee Swiss firms would probably not risk large advances.
4.
The Department desires to send a representative to assist in negotiations when these are resumed in London and therefore as much advance notice as possible of probable date would be appreciated.
Hull
  1. Not printed.