103.917/3794: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received October 15—11:59 p.m.]
7089. For Department and OEW from Riefler. Reference Embassy’s 6990 of October 1367 and your 6129, October 4th. Foot is sending to the Swiss Minister in London the following letter dated October 14th drafted with my collaboration:
“My Dear Minister,
We have now studied the two memoranda with which you furnished me, dated respectively the 30th September and 12th October. As regards the earlier memorandum, we observe with some surprise the contention that the very considerable deliveries to the Axis in the second quarter of this year and in the month of July followed inevitably from the arrangements entered into in 1941. During our long negotiations last year your trade delegation expressed on a number of occasions their confident expectation that exports of arms and machinery would fall during 1943, although they were unwilling to commit themselves to specific reductions item by item.
On the subject of credits, the attitude of the British and United States Governments has already been made clear. At the end of the war there will be many claims on the defeated Axis Powers, who will be required to make good, so far as they can, the damage which they have inflicted on so many countries. Debts owing to neutral states as a result of credits or advances given during the war will at best rank below all such claims. In addition I must emphasize that, if your Government were to commit themselves to further credits to our enemies, which inevitably would facilitate Swiss export trade to them, this would seriously prejudice the proposed further trade negotiations between the representatives of Switzerland, the United Kingdom and the United States.
As regards these negotiations, I have already handed to you a list of subjects which we wish to see included in the agenda. At our interview on 30th September I expressed some doubt as to whether the present was the most convenient time for resuming our economic negotiations, since the shape of things is changing so very rapidly, and the Allied advance in Italy is likely, sooner or later, to produce an entirely new situation. If, however, your Government wishes to send a trade delegation back to London we shall be glad to receive it. I would like to repeat once again that, in our opinion, the delegation should come prepared to deal not only with the present position but with the position that will arise when the Swiss frontier is again open, and Switzerland is able to trade freely with the outside world. In the meantime it is obviously important that your Government should refrain from entering into any commitments which would in any way tie their hands when this stage is reached. We should welcome [Page 880] an assurance that they will do nothing of the sort pending the arrival of the delegation.
Your Excellency’s memorandum of 30th September sets out the position regarding credits, but does not inform us as to the remainder of your recent agreement with Germany. We should be grateful for this information.
I now pass to your memorandum of 12th October, and to your letter of 13th October, in which you reiterate your Government’s view that we are not entitled to exert pressure on individual firms, since the agreement of 17th August.68 As regards the latter document, I do not think there is anything I can usefully add to Lord Selborne’s69 letter of 27th September, pointing out that we do not regard approaches to firms as being in any way inconsistent with an agreement between our Government for the limitation of exports to the Axis. We are, indeed, familiar with the contentions that once a war trade agreement is signed, involving the limitation of a neutral country’s exports to our enemies, we ought not to object to the transactions of individual firms, provided that such limitations are not infringed. I must make it clear that his Majesty’s Government has never been prepared to accept this contention as sound. If a neutral firm takes advantage of the war situation to increase its sales to Germany or her satellites, it is in effect choosing to assist the German war effort, and thereby helping to postpone the eventual liberation of Europe, an event which is as much in the interest of the neutral European countries as it is in that of the United Nations. In our opinion such a firm has no genuine cause for complaint if it finds itself placed upon the Statutory and Proclaimed Lists, and thereby prevented from trading with the British Empire and the United States, and with other countries overseas.
Your memorandum of 12th October proposes that we should discontinue direct approaches, such as have recently been made, and refrain from placing firms already approached on the Statutory List in return for a further limitation of Swiss exports of the more important machinery items to Axis countries other than Germany, and the continuance of restrictions on exports to Germany until the end of the war. I am sure you will appreciate that, as a belligerent country, we must judge such an offer by the test of probable results. I am sorry to say that, judged by this test, your Government’s offer is not one which we can entertain. Under the agreement of 17th August it is already settled that adjustments shall be made in respect of any country or area dropping out of the war. This in fact occurred when the Italian Government signed an armistice on 3rd September.70 Apart from the deliveries due to Italy, the figures in your memorandum represent only a very modest reduction during the remainder of the present year. We do not rule out the possibility of an agreement being arrived at whereby the Swiss Government would impose further restrictions on objectionable exports to Germany and the rest [Page 881] of Axis Europe, in return for a cessation of pressure on individual firms producing arms and machinery. But obviously such an arrangement would only be justifiable from our point of view if the proposed further reduction were calculated to produce a more satisfactory result than the method of approaches to individual firms.
Your memorandum further expresses the expectation that the Allies will agree to maintain the import quotas as granted in the agreement of August 17th for the time being, in the present quantities at least. I confirm that this is our intention, provided, of course, that the restrictions set out in the agreement are maintained in full force.
I have shown this letter to Mr. Riefler, who asks me to say that he agrees with it.”
Winant
- Not printed.↩
- See telegrams No. 5402, August 17, and No. 5518, August 22, from the Ambassador in the United Kingdom, pp. 863 and 865, respectively.↩
- British Minister of Economic Warfare.↩
- For text of the Italian Armistice signed September 3, 1943, but not announced until September 8, see Department of State, Treaties and Other International Acts Series No. 1604, or 61 Stat. (pt. 3) 2740; for correspondence on this subject, see pp. 314 ff.↩