740.00112 European War 1939/8895: Telegram

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

4590. For Department and BEW from Riefler. Reference Embassy’s airgram A–650 of July 12.48

The Swiss Minister in London has written the following letter to Mr. Dingle Foot as Parliamentary Secretary of the British Ministry of Economic Warfare, as of July 13, 1943, giving the Swiss Government’s response to the message quoted in Embassy’s telegram 4341 of July 2, 1943:

“By letter of July 3d, you had been good enough to advise us as to the reply which His Majesty’s Government and the Economic Warfare Division of the American Embassy intended to convey to the Swiss Government, in regard to the Swiss proposals for a resumption of trade discussions in London, as contained in M. Thurnheer’s memorandum of June 21st, 1943.49

I am now in receipt of a cable from Bern, stating that the British reply was communicated by His Majesty’s Minister in Bern to M. Stampfli, head of the Department of Public Economy, on July 6th. I am further informed that M. Stampfli was to receive His Majesty’s Minister on the 12th instant, and to convey to Mr. Norton the Swiss Federal Council’s reply in the following sense:

1.
The Swiss Government have already put into effect, as from July 1st, 1943, the following restrictions on exports to Germany: Exports under tariff items 811/13, 1083, 1084, 948a, 753/56, 914h and 937 for the second half year of 1943 to be reduced under each position to 40% of the value of total exports in 1942.
2.
In addition, the Swiss Government are resolved to put into effect as from August 1st, 1943, the following restrictions on exports to Germany: Exports under tariff items 809a1/a3, M.6, 935d and 936d for the remaining 5 months of 1943 not to exceed, for each position, 33⅓% of the value of total exports in 1942.
(Contrary to the information in M. Thurnheer’s memorandum of June 21st, the above restrictions have thus been placed on a basis of value, instead of a basis of weight; in view of the general increase in prices, this modification constitutes an improvement on Bern’s previous proposal.)
3.
The Swiss Government are prepared to limit as from August 1st, 1943, exports to Germany of radio equipment under tariff item 954a, to 33⅓% of the value of exports in 1942.
4.
The Swiss Government are prepared to itemize fuses under tariff item 948a, as desired.
5.
The Swiss Government are prepared to keep the above restrictions on exports to Germany in force for as long as the Allies will allow imports of foodstuffs into Switzerland in the same quantities at least as before the suspension of quotas.
6.
The Swiss Government renew their offer in regard to dairy produce and cattle already mentioned in M. Thurnheer’s memorandum of June 21st, under article II. The Swiss Government are prepared forthwith to put these prohibitions and restrictions into effect, provided the Allies are prepared simultaneously to open satisfactory import quotas for fodder.
7.
As to the other questions, such as the remaining tariff items under group 3 (including tariff item 947), the restrictions of exports to Axis countries other than Germany, etc., the Swiss Federal Council are of opinion that a satisfactory result could hardly be reached by a further exchange of correspondence. They also feel that their concessions so far show clearly their actual desire to meet the Allied desiderata as far as possible and that the time should now have come for the return of the Swiss Trade Delegation to London.

On the other hand, the Legation has been advised that the negotiations with the German Delegation which have been going on in Bern for a number of weeks, are continuing, especially in regard to further export restrictions on group 3 and the limitation of new credits to a minimum. These negotiations are, however, raising a number of difficult questions, which would seem to require a close contact with London. For this reason also, the Swiss authorities think that it would be in the interest of all parties concerned if discussions in London could be resumed at the earliest possible moment. It is indeed felt that the presence of the Swiss Trade Delegation here should greatly assist in securing the fullest possible coordination with the negotiations in Bern.

The Legation has, therefore, been instructed to call your special attention on this point.

As your letter of July 3rd mentions that the instructions which had been cabled to Bern, were likewise given on behalf of the Economic Warfare Division of the U.S. Embassy, I take the liberty of enclosing a copy of the present letter, in case you should wish to pass it on to Minister Riefler.”

We find this letter difficult to evaluate. On the face of it, it looks as though the Swiss had tried to meet us. At the same time it is full of possibilities for subterfuge if subterfuge were being sought. [Page 858] These and our other reactions to this letter are embodied in the following self-explanatory message from MEW to the British Legation, Bern, drafted with my collaboration after studying the Swiss Minister’s letter and being sent simultaneously with this telegram:

  • “1. Swiss Legation here has now communicated terms of Swiss reply which was due also to be handed to you on 12th July. While this apparently represents a step forward, we and the Americans observe the following loopholes, which might enable the Swiss to deprive us of any substantial benefit:
    a.
    The proposed concessions refer only to Germany while other Axis countries are specifically excluded. Obviously this might mean that deliveries to the Axis as a whole were not reduced at all. In particular, a situation might soon arise in which certain deliveries to Italy would be more objectionable even than deliveries to Germany.
    b.
    There is no safeguard against the undervaluing of objectionable exports so that there might be no reduction, or even an increase, in the weight of such exports.
    c.
    Watchmakers tools and possibly other machinery could be exported to the Axis, together with skilled labor, thus making good the reduction in actual exports from Switzerland of fuses and other products.
  • 2. For these reasons we cannot regard the Swiss offer as satisfactory, and should much prefer the acceptance of proposals contained in my reference telegram. We are, however, prepared to reconsider our attitude if the Swiss will give us forthwith the following assurances:
    a.
    That they have not arranged and will not permit any fresh development which might deprive us of the benefit of their proposed concessions (e.g., export of watchmakers’ tools).
    b.
    That during the last 6 months of 1943 exports to Europe other than Germany of the items under discussion will not exceed 50% of 1942 exports.
    c.
    That exports to the whole of Axis Europe under the 3 items in group 3 that are not covered by the offer to reduce shall not exceed 50% of the 1942 exports.
    d.
    That the proposals already made regarding exports to Germany of these machinery items shall be put into effect forthwith.
    e.
    That the limitation to 40% of 1942 shall apply to watchmakers’ tools (item 747) as originally proposed in the Swiss Minister’s memorandum of 21st June.
    f.
    That there will be no reduction in price of any of the articles covered by these proposals.
  • 3. If the Swiss are prepared to accept these terms we will recommend to our respective Governments that half the food quotas should be resumed, and that the delegation shall be received in London to discuss the other outstanding matters. You should, however, make it clear to the Swiss Government that this will involve reconsideration both in London and in Washington (the American Embassy [Page 859] has not had time to obtain reactions of U.S. Government and we may wish to develop some points made here), and must, therefore, in any event involve a further delay in the resumption of navicerts. It would, therefore, be considerably to their advantage to accept our original proposals.
  • 4. Please report action taken so that we can return similar reply here.”

I should appreciate your views. [Riefler.]

Winant
  1. Not printed.
  2. See telegram No. 4109, June 21, from the Ambassador in the United Kingdom, p. 848.