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

740.00112 European War 1939/9687a: Telegram

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

Washington, October 4, 1943.

6129. For Economic Warfare Division. In view of the military developments affecting the Swiss negotiations, and also the immediate danger that the Swiss may at any moment agree to grant the Germans additional credits in the form of an export guarantee scheme, Department and Office of Economic Warfare have reviewed our bargaining position and wish to present the following views for consideration by you and the Ministry of Economic Warfare:

1. Although we have felt that it would be unwise to negotiate by cable and considered it desirable to postpone further discussions until the Swiss Delegation arrived in London, the credit question is of such primary importance and so fundamental to the entire negotiations that we believe it is of vital importance to obtain assurances immediately that the Swiss will not commit themselves on this export guarantee scheme or any other further credits to the enemy, in as much as this should be one of the major points for discussion with them in London during October. The Swiss should be asked to give ns this assurance within, say, 10 days. We understand that it was your intention to couple the invitation to the Swiss with a protest against any further credits, but we should like to suggest that this protest not be couched in language which would indicate that it is merely made for the record. In fact, we think it should be pointed out to the Swiss that unless they assure us that additional credits will not be granted until we have had a proper opportunity of discussion, it will greatly prejudice any discussions in London. If the Swiss do commit themselves with the Germans on additional credits, it would seem to be virtually impossible for us to obtain adequate reductions in the undesirable exports for 1944. If at this stage of the war the Swiss are willing to defy our wishes to the extent of instituting an export credit guarantee system, they will not be likely to come to terms on other significant issues on the agenda. It might be pointed out to the Swiss in this connection that the greater the credits they grant to Germany the smaller the goods imports which they will receive from Germany. The Swiss have continually attempted to justify their previous concessions to Germany on the ground that it was necessary for them to maintain imports from Germany. Thus they are injuring their own interests in making it possible for Germany to make further reductions in deliveries of coal, etc. Reduced imports from Germany cannot be replaced by shipments through the blockade unless we are willing to make great sacrifices. We should not be inclined to make such sacrifices in the face of credit concessions granted by Switzerland to our enemy. However, care should be taken not to give the Swiss the impression that if they refuse additional credits to Germany we shall cease our efforts to obtain limitations on undesirable exports. For your information we regard proper ceilings on exports of undesirable items in 1944 as our major objective, and, if a choice had to be made, as more important than a favorable solution of the credit question. But we feel that the credit issue is so immediate that it should be squarely faced and, if possible, settled at once.

2. If the Swiss answer on credits is unsatisfactory we need not formally recall our invitation for their delegation to come to London, but we should be careful not to allow them to prolong the negotiations by endless discussions on technical or minor points. In this connection we feel that it would be the best strategy to confront the Swiss Delegation upon their arrival with a full text of a proposed agreement, at least on the major points which must be a condition precedent to any further discussions on relatively minor topics. These major points are agreement on credits and agreement on reduction of exports of undesirable items in 1944 as well as the spacing of exports under the existing agreement for 1943. It is our view that the Swiss should be told that while we are prepared to make supply sacrifices on their behalf, and while there are other matters on which we should like to request their agreement in the course of discussion, we would see no point in going into any of these other matters until we have at least an agreement in principle on these two major issues of immediate importance. Moreover, we should point out that because of the swift development of events we cannot permit the discussions on these points to be prolonged and that therefore we must insist that an agreement be reached on these major issues during October. If such an agreement cannot be reached to our satisfaction within that time, it is doubtful whether we would wish to discuss any of the other points or indeed discuss further any supply program for Switzerland.

3. We are sending you by air mail despatch a draft of a proposed Swiss Declaration and a proposed United Kingdom–United States Declaration which could constitute the basis of an acceptable agreement.⁶⁶ Although it might be necessary for us to make concessions on a number of points, we have tried to formulate the terms of these declarations in such a way as to indicate to the Swiss that our demands are reasonable and realistic.

4. With regard to the Swiss policy on transit of war materials and military personnel, we feel that this objective, while undoubtedly of the highest priority, could best be pursued through immediate discussions in Bern. We had assumed that the recent Swiss reply on this matter was satisfactory and that the only outstanding questions related to the prohibition of petroleum transits and possibly more precise assurances that adequate inspection would be guaranteed. In any case, since these questions are so urgent, would it not be best to take them up in Bern immediately outside of the economic negotiations and in advance of the arrival of the Delegation in London? We believe that our discussions on this topic should be confined to those questions on which the Swiss reply was not adequate. It may unnecessarily irritate the Swiss to ask them to give us any reiteration of or formal understanding on their general policy prohibiting such military traffic, since this may indicate a lack of trust on our part and also imply that the Swiss action would be a concession to us rather than an assertion of their neutral duties.

We should like to have your views and those of the Ministry of Economic Warfare on the points raised in this telegram and also in the accompanying despatch proposing the text of an agreement.

Hull

66. Despatch No. 3261, October 13, 1943, and enclosures not printed.