740.00112 European War 1939/9150: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received August 22—7:25 a.m.]
5519. From Riefler for Department and OEW. Swiss acceptance of British offer reported in Embassy’s immediately preceding telegram No. 551856 arrived shortly after our receipt of Bern’s 5049 and 5056 of August 18.57 In spite of this apparent flagrant violation of good faith MEW and Embassy do not feel that it would be in our interest to denounce the agreement since (a) the objectionable exports have already taken place, and (b) at last we have secured a ceiling on further exports of these objectionable items to the Axis. We propose consequently to implement the agreement by (1) issuing navicerts and (2) going forward with preparations to receive a Swiss delegation. We propose to interpret our navicert commitment narrowly.
2. We feel, however, that the Swiss actions cannot be accepted without a very strong reaction. I have collaborated with Foot in the [Page 867] drafting of the letter that appears at the end of this telegram. It was signed by Foot and delivered to the Swiss Minister today. Please telegraph urgently authority to associate myself with this letter.
3. Now that we have a ceiling on export of undesirable items, we propose to proceed with a very active listing policy, since there will be much less danger of this turning facilities over to Axis. The threat of postwar blacklisting (Department’s A–775 June 358) will greatly increase effectiveness of this weapon. This is now undergoing final clearance at Foreign Office. You should hear further from us on this matter shortly.
4. The letter from Foot to Thurnheer follows:
“Your Government can have no illusions as to the way we must regard the figures of Swiss exports which we have just received. Ever since the trade delegation arrived in London we have made it perfectly clear that we attached the highest importance to a substantial reduction in these forms of export. We have frequently been assured that the Swiss authorities intend to meet our wishes to the best of their ability. In spite of this, at a time when our armies are commencing the invasion of Axis Europe, we are faced with a sudden marked increase in Swiss assistance to Germany and her satellites. We can hardly regard this as evidence of a desire on the part of your Government to contribute to the liberation of Europe.
It is true that these increases do not technically rule out the reductions which your Government has recently proposed. But they must have been well aware that to permit this sudden expansion at this state of the war was in fact a most valuable form of assistance to our enemies. The timing of these increases, namely in June and July, left us in ignorance of their existence when we were considering the latest offers put forward by the Swiss Government.
As a result total exports under group II have increased from 3108.9 metric tons (value 23,453,200 Swiss francs) in the first quarter to 3906.7 metric tons (value 32,012,000 Swiss francs) in the second quarter. Under group III the corresponding increases are from 2748.5 tons (value 64,490,400 Swiss francs) to 4361.5 tons (value 81,129,000 Swiss francs). For those items recorded in pieces there has been an increase from 30,364 to 35,480 pieces. I would draw your particular attention [apparent omission]:
| First Quarter | Second Quarter | |||
| Metric Tons | 1000 Swiss Francs | Metric Tons | 1000 Swiss France | |
| Gas and petrol driven motors | 739.0 | 3,983.7 | 910.4 | 5,915.5 |
| Dynamo electric machines | 287.2 | 2,695.4 | 1,225.7 | 9,798.4 |
| Machine tools of all kinds | 1,567.2 | 20,171.3 | 2,209.1 | 28,409.9 |
| Radio equipment | 13.4 | 1,349.2 | 21.0 | 2,655.5 |
For the month of July the increases are even more startling in respect of certain items. Steel ball and roller bearings have increased from 1,100,000 Swiss francs to 2,700,000 Swiss francs as compared with the previous month. Machine tools of all kinds have gone up from 11,465,000 Swiss francs to 19,136,000, other machinery N. E. S. from 1,202,000 to 2,115,000. There is also a substantial increase in exports of radio equipment.
Moreover, these July figures to which I have referred are not only a considerable increase on those for June, but are also very much higher than the monthly average for 1942.
You will also appreciate that three of these items, namely steel ball and roller bearings, machine tools of all kinds and radio equipment are items in respect of which your Government has promised to impose an export quota as from 1st August. The benefit which we expected to obtain from this concession is largely nullified by the very substantial exports in July. For example, steel ball and roller bearings supplied to Germany were to be kept down to 2,367,000 Swiss francs from August to December, but the July exports amounted to 2,700,000 Swiss francs. The same observations apply to machine tools and radio equipment.
As regards other machinery not elsewhere specified, magnetos and dynamo electric machines (in respect of all of which items the reductions were to run from 1st July) it is true that the figures are within the agreed export quotas. But we are deprived to a considerable extent of the benefit of these arrangements because so high a proportion of the total has been crowded into the month of July.
These increases are the more surprising in view of the assurances which we have received from the Swiss Government. At our interview on 21st June you stated that your Government wished to point out (1) that the extent of their resistance to German demands was shown by the fact that they had not yet made a fresh treaty and (2) that during the whole of this year exports had been below the corresponding figure for 1942, both in weight and in value. On 30th July the Federal Department of Public Economy delivered a memorandum to the British Legation, of which the translation which you supplied us in London contains the following statement: ‘The Swiss Government will naturally not take any measures likely to frustrate His Majesty’s and the United States Governments of the advantages which have been conceded to them in the matter of export restrictions.’ They also expressed regret that their omission in their former proposals to refer to Axis countries other than Germany should have given rise to some hesitation as to their real intentions in the mind of His Majesty’s Government and thus delayed the reopening of discussions. Finally, they expressed the hope that these new proposals would allow the British and American Governments to authorize a new supply of foodstuffs to Switzerland and to fix an early date for the reopening of discussions in London.
You will therefore readily understand the astonishment with which we received these statistics. It certainly does not make it easier for us to enter into an agreement if such agreement is not to be carried out in the spirit as well as in the letter. I shall be grateful, therefore, [Page 869] if you will transmit these observations to your Government, and will furnish me with their comments as soon as possible.”
Winant