Foreign Relations of the United States: Diplomatic Papers, 1944, Europe, Volume IV

740.00112 European War 1939/10902: Telegram

The Acting Secretary of State to the Minister in Sweden (Johnson)

Washington, June 3, 1944—midnight.

1105. For the Minister and Griffis.

1. After careful analysis of the SKF offer and your comments and recommendations, FEA and the Department have reached the conclusion that we cannot accept the proposals of the Company as outlined in your 1909 of May 28. We are disappointed, as you are, with the initial offer which falls far short of our request for a total embargo. While we cannot give our acceptance to the Company’s proposals, we agree with your conclusions that practical results may be achieved for the critical period of the next few months by pressing for further concessions during this period, reserving freedom of action with respect to the longer future. You are accordingly authorized to make a counter proposal to SKF designed to achieve further advantages along the lines of the Minister’s recommendations of June 1 and to settle within the limits you proposed but subject to the following safeguards, assurances, and clarifications:

2. We are especially concerned about the clause in paragraph 3 of your 1909 permitting substitution of other types for deducted aircraft bearings. This would provide the first opportunity since March for Germans to place substitution orders to counteract bottlenecks resulting from Allied raids. The following three provisions are designed to safeguard us against this contingency. We would require these safeguards or others that accomplish substantially the same ends:

a. Total embargo on aircraft bearings or parts against the Axis to apply to all deliveries through remainder of 1944 of all bearings used by Axis in aircraft, including frames, instruments, engines, superchargers, etc.

b. We be given a satisfactory preclusive agreement which would effectively block German substitute orders in groups 2, 3, 4 and 5 up to and including 210 mm. outer diameter. This might take the form of an option on currently unscheduled SKF capacity for manufacture of all bearings or parts which we know are now used in Axis military equipment other than aircraft, or types that could be readily substituted therefor. For this option we suggest you offer whatever minimum sum you believe necessary.

c. Waring and technical associate nominated by E. W. D. (probably Pincus) will be given an opportunity to screen reduced schedules for deliveries up to October 1 to see that they are spread over the list and are not concentrated on particular types for which the Germans have most urgent need.

3. Should safeguards such as outlined above prove to be unobtainable, we would prefer a straight postponement of deliveries of all types until after September 30, within the percentage limits, rather than give up the undertaking we have received from the Swedish Government not to permit substitutions. We would prefer deliveries to be scattered among all types now on order (including aircraft bearings) at a rate of not more than say 10 or 20 percent of the present monthly ceiling.

4. Your proposals on bearing machinery are satisfactory. You should try to make the percentage reductions as favorable to us as possible.

5. You have not yet reported on special steels used for the manufacture of bearings. We desire to stop or impede shipments by SKF or subsidiaries of such steels to the Axis as far as possible.

6. It should be understood that after June 5, up to the time when a deal is arranged, the embargo on all bearings and bearing machinery should continue to apply. If this is impossible to obtain, it is understood that Waring will screen types on such minimum deliveries as you may permit.

7. You are authorized to close with SKF in accordance with our proposals under either paragraph 2 or 3 above, if possible as they stand, or if unavoidable with relinquishment of additional month or extra percentage reduction, in whole or in part. At the same time, you should make clear to the Company that we regard this arrangement as a compromise only, and must reserve full freedom to revert to our original demands in the light of the developing military situation.

8. At their discretion Griffis and Waring may inform SKF that if it cannot provide safeguards against the effect of substitutions such as we have sought to provide in paragraphs 2 and 3 above, they will be forced to advise their Governments that in their opinion the SKF offer was not put forward in a sincere effort to go even part way to meet our objectives. In effect it would permit the Germans to cancel contracts for specific types of bearings of which they are no longer in most urgent need and to substitute therefor orders for other bearings of higher current importance. The offer therefore would have the effect of depriving us of our present advantages arising out of the undertaking given by the Government against shifts in German orders and would increase rather than decrease the current contribution of the SKF Company to the war production of our Enemies.

Please fully inform your British colleague and Waring of the contents of this telegram with which Foot⁷⁰ concurs. Sent to Stockholm, repeated to London as Department’s 4427.

Stettinius

70. Mr. Foot was temporarily in Washington.