740.00112 European War 1939/10919: Telegram
The Minister in Sweden (Johnson) to the Secretary of State
[Received 11:06 p.m.]
1954. My 1909, May 28, 4 p.m., 481 to London; and 1910, May 28, 6 p.m., 482 to London; and Department’s 1063, May 30, 11 p.m.68 [Page 559] Considering bearing question by itself and without relation to any of our other desires for Swedish performance, Legation believes there might be disadvantages to unqualified acceptance of SKF’s proposal as it stands. It should not in my view, however, be summarily rejected unless our Government with the unqualified support of the British is prepared to impose drastic economic warfare sanctions to implement our threats.
Department and FEA are aware that moral pressures of blacklisting, freezing of assets, tightening of blockade, seizures, and exclusion from markets and sources of supplies have been freely used in negotiations and in attendant publicity which produced SKF proposals. If through use of these weapons all we could show for our efforts were a result so far removed from complete embargo then these threats may well lose force for any future demands that may be made.
It is suggested therefore that Department and FEA may wish instead of an unqualified acceptance of SKF proposals to accept them in principle at same time pressing for a larger reduction just short of complete embargo and for a longer period, with all reservations as to future action. Thus it is suggested that we might request reduction along following lines: A reduction from German quota less aircraft bearings as defined in original proposal (1,816,000 kronor) of 80% instead 50% for period June through September 30 instead of June to September 1. A reduction of 80% would authorize shipments of kronor 366,000 monthly to Germany. Adding shipments to German-controlled territories at non-reduced level as proposed by SKF would leave total monthly shipments to Axis Europe 661,000 kronor. This is to be compared to 1,058,000 kronor monthly shipments authorized under SKF proposal. Whereas SKF proposal results in a reduction to approximately one-third of the monthly quota now permitted to Axis Europe, counter-proposal would result in reduction to approximately one-quarter to Axis Europe and reduction would be effective for additional month. Same reduction of 80% and additional month duration would also apply to bearing machinery.
This counter-proposal would not constitute a complete embargo which Swedes have constantly declared to be impossible and which in my opinion they will not give. Moreover, by making this counterproposal we would be in position if it should appear we would lose everything by insisting on full terms of counter-proposal to give up either the extra month demand or the greater reduction demand.
We are recommending counter-proposal for following reasons:
- 1.
- Meeting our increased demand would not constitute in principle greater breach of Swedish-German trade agreement than would SKF proposal. Since the door has now been opened to reduced shipments we should try within framework proposed by SKF to open door as wide as possible.
- 2.
- For purposes of future demands that may be made our proposal safeguards value of all economic and moral threats that have been employed during course of negotiations by reason of fact that objectives gained are close to complete embargo. Thus difference on 3 months’ basis only between SKF proposal and above suggested counterproposal would be 12,000 kronor on bearings alone which is significant amount.
- 3.
- Finally since Swedes have expressed suspicion that our bearings demands are opening wedge for other demands which have ulterior purpose of embroiling them with Germans, bearings agreement accepted by us should be satisfactory enough so that we will be content not to use same type of pressure for further new concessions at least until changed military situation introduces new bargaining factor or negotiations are reopened on bearings shipments just prior to termination of embargo.
Should Department and FEA agree to making of counter-proposal it is not likely that Swedes could maintain complete embargo beyond June 5. However, we could insist that during course of negotiations shipments be maintained at rate no higher than provided for in SKF proposal on condition that adjustments would be made should counterproposal be accepted. This would also permit us should it develop that counter-proposal cannot be accepted in whole or in part to at least retain SKF proposal if such is deemed desirable.
Immediately following telegram69 submits Legation’s recommendations regarding procedure to be followed in event of further demands prior to successful invasion of enemy Europe near Sweden.
My 494 repeats this to London.