Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume V

740.00112A European War, 1939/35861: Telegram

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

London, September 3, 1943.
[Received 9:32 p.m.]

5845. Reference Department’s A–775, June 3, 1943; Department’s telegrams 3753, June 18; 5336, September 1,³³ and Acheson’s letter to Riefler June 19 regarding possibilities of creating uncertainty relative to post-war employment of the Proclaimed and Statutory Lists.

Department’s instructions on this subject have been carefully reviewed and discussions held with MEW where action was delayed several weeks because of the desire for advance clearance of the subject matter with Foreign Office, other Departments and the Dominions.

MEW and Embassy are in agreement that selective word-of-mouth approaches by our Missions to individual firms in Switzerland, Sweden, Spain, and Portugal constitute the best tactics in the plan for creating uncertainty regarding the possibility of post-war listing. Concurrently to that approach it is believed advantageous to strengthen our representatives’ intimations with judiciously placed press articles and related publicity to the fact that in the last war the blockade and black-listing did not become inoperative with the Armistice.

Should this program ultimately require an official statement of Allied policy on post-war listing it is essential that points to be included in any such official statement should be agreed upon with MEW in advance. Accordingly, the Embassy prepared a draft of five points designed to gain the ends desired without incurring the disadvantages mentioned in Acheson’s letter. It is believed by Embassy that the main consequences which Department wishes to attain in any such statement were that (a) the announcement should not be the cause of repercussions in the other American Republics and thus prejudice the use of the Lists and other political and economic warfare programs in South America and (b) that the Department should not be manoeuvered into making a statement on post-war listing in advance of the time when a conclusive decision could be arrived at regarding the relative advantages and disadvantages of such post-war controls.

It is believed that a statement containing the following points will attain the ends desired:

1. The Allies disclaim any intention to perpetuate the Statutory and Proclaimed Lists as part and parcel of the post-war regime.

2. To attain this end the Allies are now studying an orderly method for eliminating the Lists at the end of the war.

3. Considering the “total” character of the present conflict and its vast impact upon commerce it is recognized that adjustments upon cessation of hostilities inevitably will take time to effect.

4. The problem of eliminating economic warfare controls, and in particular the Statutory and Proclaimed Lists, is believed to be capable of prompt solution in regions far removed from the scene of conflict.

5. At present the Allied Governments anticipate that the most serious problem in the elimination of such controls will probably arise in countries within the European blockade area where persons and firms, nationals of or residents in neutral countries, have nevertheless engaged actively in equipping or servicing the military machines of the enemy—a machine which the Allied Governments are determined to destroy. A similar delay in removing such controls may also arise where such persons and firms have elected to make special contributions to the economies of our enemies.

The device used to avoid the possibility of creating anxiety in the other American Republics is found in point 5: “countries within the European blockade area”. Firms in the Western Hemisphere engaged in international trade are believed to hold an accurate understanding of the geographical line upon which the European blockade is created and thus should not be caused anxiety by an announcement indicating possible delay in eliminating the Proclaimed and Statutory Lists as affecting persons within the European area.

The next phrase in point 5, “where persons and firms, nationals of or residents in neutral countries, have nevertheless engaged” is drafted to point out that such neutrals, not being compelled to assist the enemy, may be considered in the post-war period even more objectionable than firms within Axis countries where a totalitarian regime compels full contribution to the enemy war potential. This element of choice, repeated in point 5 in the concluding sentence “have elected” is designed to meet the objection in paragraph 2 of the Department’s 5871, November 2 [21], 1942,³⁴ wherein it is desired to avoid the implication that Axis firms within their respective countries will also be made subject to international retaliatory trade restrictions. It is believed the Department does not wish to have firms within Axis countries gain the impression that our post-war listing and other sanctions against objectionable firms in neutral countries represents the minimum [maximum] of unfavorable treatment which Axis firms within Axis countries may expect.

Subject to the reservation on the part of both parties of the right to consider jointly amendments to the statement, if changing circumstances make amendments necessary, the five points mentioned above have been formally agreed to by MEW for use in any statement which may be required to be issued as result of the word-of-mouth approach by our representatives in neutral Europe. Corresponding concurrence by the Department is urgently requested by telegraph to permit early despatch of instructions to Bern, Stockholm, Madrid and Lisbon.

If Department concurs in points for the statement, Embassy favors transmittal to Bern, Stockholm, Madrid and Lisbon of instructions contained in paragraph 5 (a to e inclusive) of Department’s A–775 of June 3. In connection with paragraph 5 (f) of proposed instruction the Embassy believes that representatives in neutral Europe would encounter difficulty in reporting the approximate number of firms likely to be susceptible to post-war economic controls and would also be at a loss to report in detail on the nature and extent of the contribution which such firms are rendering to the enemy. It is felt that if the instructions over-emphasize the need for a statistical report on the effect of post-war listing practical action may be deferred; further, that if by confining the threat to countries within the European blockade area it proves possible to avoid any disadvantages in the Western Hemisphere, that only net gain can result from the program and for that reason there is no need to measure advantages versus disadvantages. Therefore, Embassy proposes the following revised paragraph (f) to conclude the instruction:

(f) To assist the Department in giving consideration to such supplemental measures as may seem practical for the purpose of enhancing the fear of post-war listed status, please report briefly, with copy to London, your general comments regarding the extent to which firms in the country to which you are accredited are trading substantially with the enemy and what proportion of this group would be particularly susceptible to the post-war effect of economic controls. If possible, it would be appreciated if you will give some indication of the nature and extent of the benefit to the enemy which is at present being rendered by firms which you consider to be susceptible to the threat of post-war.

If the Department concurs in the foregoing instruction to include paragraph (f), as amended, cabled advice is requested. MEW has drafted similar instructions to its representatives in Switzerland, Sweden, Spain, and Portugal, to which it is proposed to attach copy of the instruction being received by the American representative. Accordingly, Department’s approval of the proposed American instructions is requested as soon as feasible.

Winant

33. Telegrams No. 3753 and No. 5336 not printed.
34. Foreign Relations, 1942, vol. v, p. 299.