740.00112A European War, 1939/19800: Airgram
The Secretary of State to the Ambassador in the United Kingdom ( Winant )
Washington
, June 3,
1943—7 p.m.
A–775. Department’s telegram 5871, November 21, 1942.28
- 1.
- We have discussed here with Minister Riefler the question of strengthening the deterrent effect of the threat of Proclaimed Listing upon firms in Switzerland, Sweden, Spain and Portugal. We recognize that the belief is widespread in neutral European commercial circles that the United States and Great Britain will at the close of the war promptly abandon the war trade lists and that any penalties which may flow from presence upon the lists during the war will be terminated forthwith. We also recognize that this belief, when combined with the increasingly common impression that the United Nations will bring the war to a victorious conclusion within the foreseeable future, acts more and more to minimize the hazards of listing in the eyes of a number of firms in neutral European countries. Those firms now feel they may with comparative impunity deal unrestrictedly with the enemy in the security of their belief that the war will soon be over and all will be forgotten or forgiven. That such an attitude interferes with the full effectiveness of the system of war trade lists is becoming increasingly obvious.
- 2.
- We are not prepared at this time to decide whether any part of the war trade lists will be carried into the post-war period. As we have pointed out, such a determination is inextricably interwoven with the entire fabric of our post-war program for which the pattern is not yet fully devised. Thus a public statement by this Government that portions of the lists will be retained after the cessation of hostilities is out of the question at present.
- 3.
- The Department believes, however, that some steps may be taken, short of a formal declaration as to the post-war position of listees, which will operate to strengthen respect for the Proclaimed List in neutral European countries through creating doubts among selected [Page 330] firms in those countries as to the duration of the penalties of listing. The immediate step which we contemplate is a direct approach (as described in paragraph 5 hereof) by the missions in the neutral European countries to firms in those countries which the missions have reason to believe would be susceptible to pressure in the form of engendered fears as to post-war continuation of certain economic warfare controls, including war trade listing. Further consideration will be given to additional steps such as planted newspaper articles and other forms of unofficial publicity on the possibility of portions of our economic warfare controls being projected into the post-war period.
- 4.
- We cannot overlook the fact that such informal steps as are taken may produce a situation requiring some public and official statement here or in London on the post-war status of the lists. It is our hope and belief that such a situation may be avoided. However, if circumstances should compel a statement, it would have to be prepared with a view to avoiding the arousing of substantially increased resistance to the lists in the other American Republics. We have been in the past, and still are, subject to considerable pressure in that area for the removal of the war trade lists. We cannot afford to create a situation which would seriously increase the difficulties of maintaining lists in those countries. Thus it is our present thought that such statement as may be made must disclaim any intention to project the lists, as a punitive measure, into the peace as part and parcel of the post-war regime. It would, however, point out 1) that adjustments upon the cessation of hostilities inevitably take time to effect; 2) that the problem appears to be capable of rapid solution in regions far removed from the scene of conflict; 3) that the greatest administrative delay, carrying with it the promise of serious problems, is likely to occur in delisting those firms which have gone out of their way to assist the enemy’s war effort or which have so actively engaged in equipping or servicing or benefiting the military machine of the enemy as to render themselves subject to the post-war controls necessary to remove the menace of that machine.
- 5.
- The following is the substance of a telegram which the Department
proposes that the Embassy send to the missions in Bern, Stockholm,
Madrid and Lisbon:
- a)
- It is apparent that there is a fairly widespread belief in the neutral countries that British and American economic warfare controls, including war trade lists, will be abandoned promptly at the close of hostilities and that this belief is reducing the deterrent effect of the listing threat. Various suggestions have been made as to how this impression can be overcome and the threat of possible post-war consequences of our controls used as an instrument for putting greater pressure on neutral firms and thereby reducing their assistance to [Page 331] the enemy war effort. While we are not prepared at this time to issue a public statement indicating that a decision has been reached to continue the controls after the war, we believe the threat of listing could be used more effectively in dealing with individual firms by intimating the possibility of post-war consequences.
- b)
- Whenever you believe that such a threat could be effectively used in negotiations with a neutral firm, you may point out that the impression which appears to prevail in some neutral commercial circles that all of our controls will be promptly abandoned at the conclusion of hostilities is ill-founded. As adjustments inevitably take time to effect, it is obvious that it will be necessary, for an indefinite period after the actual conclusion of hostilities, to continue measures of economic control in various fields. You may say that you have reason to believe that, in the administration of such controls during the period following the cessation of hostilities, the position of individual neutral firms during the war will be taken into account. You may point out to the selected firm that continuation of its assistance to the enemy war effort may prevent its early participation in the resumption of peacetime international commerce and delay the release of any of its assets which are or may become blocked in the United States. You may also, in appropriate cases, point out that the inclusion of a neutral firm or its officers or directors in the Proclaimed List may result in their property in this country being treated as enemy property. This threat should naturally be used with great discretion.
- c)
- The effectiveness of this proposed procedure will rest heavily upon the care with which the missions select the firms to which it is to be applied and the adroitness with which the approach is made. It is obvious that this particular type of approach can only be useful in cases where (i) the mission has reason to believe that the individual firm would be influenced by fears of its post-war status as a listed firm and (ii) the mission is prepared, when the firm has not already been listed, to recommend its listing forthwith if it does not desist from its inimical activities.
- d)
- As it is advisable that parallel action be taken in each case by both the American and the British missions, you are instructed to keep your British colleague currently informed concerning approaches which you contemplate making to individual firms in accordance with the foregoing.
- e)
- You are requested to submit reports from time to time to the Department, repeating or sending copies to the London Embassy, on what action you have taken pursuant to the instruction and the effects thereof. The first report should be submitted not later than one month following the receipt of this instruction.
- f)
- To assist us in giving consideration to such supplemental measures as may seem practical for the purpose of enhancing the fear of a post-war listed status, please report the approximate number of firms in the country to which you are accredited which are trading substantially with the enemy and which would be particularly susceptible to the post-war effect of economic controls, together with some indication of the nature and extent of the benefit to the enemy which they are at present rendering.
- 6.
- It is desired that the Embassy discuss with the appropriate British authorities the views and proposals contained in this airgram and submit to the Department the Embassy’s comments and recommendations thereon.
Hull