740.00112 European War 1939/10–2344: Telegram
The Acting Secretary of State to the Chargé in the United Kingdom (Gallman)
9028. From Department, FEA and USCC. Your 9105, October 23 repeated to Stockholm as your 613, and Stockholm’s 4097, October 9; 4109, October 10 and 4243, October 18 to the Department repeated to you as Stockholm’s 1243, 1250 and 1312 respectively.10 As result of SKF’s agreement to cease exports of bearings and machinery to Germany sympathetic consideration has been given by the interested agencies here to the five requests put forward by SKF. We are somewhat uncertain as to the exact significance of some of the requests, but as we understand them the following are our present views:
- (a)
- The United States Government cannot accept the view that discrimination has been practiced against SKF. SKF, like other companies owning property and doing business in the United States, must conform to United States regulations designed to protect our [Page 658] wartime interests. Within this general principle we can assure SKF that no discrimination will be practiced against them in the future.
- (b)
- We agree with Foot that SKF properties in Germany will be treated without discrimination in the same manner as other similar properties owned in neutral countries and having similar relationship to German war effort. All such properties would be treated in accordance with general policy decisions of interested governments.
- (c)
- We do not believe there is any obligation, either legal or moral, to compensate SKF for losses arising from cessation of shipments after October 12th. Griffis Agreement11 clearly confines our liability to losses “due solely to the operation of this agreement”, which ended October 12. As to possible moral obligation, our position has consistently been that Sweden should completely stop export of bearings. Moreover, we have more recently called upon Swedish Government to cease all exports to Germany, especially products of direct benefit to German military effort. In the case of special steels, we have indicated (Department’s 2151, October 26, 7 p.m., repeated to London as 8941) that no compensation could be expected for cessation of such exports, and we believe same reasoning applies in even greater measure to bearings. We fully recognize our obligation to reimburse SKF for losses during period May 12 to October 12; moreover, we have agreed to place orders for over 10 million kronor additional. We cannot agree, therefore, to compensation for any bearings except those which would, except for Griffis Agreement, have been shipped (not merely manufactured) before October 12th. In this connection, we do not understand significance of statement in Stockholm’s 4243 that SKF is continuing production of bearings, and implication that Hamberg expects we will take over bearings produced for shipment after October 12th. Our position should be made clear to SKF without delay.
- (d)
- We are not clear regarding meaning of SKF request for “facilities for exports”. We presume this is with relation to division of markets for bearings and agree, if so, that answer should be in the most general terms and based upon general Allied postwar commercial policy. In this context we would be willing to assure SKF that they will not be discriminated against.
- (e)
- We agree with Foot’s suggestion regarding access to raw materials. We suggest, moreover, that SKF could be assured that sympathetic consideration is being given by us to their request for supplies rejected by us last August. (Department’s 6194 of August 5th.12)
We believe American representative should accompany British experts to Sweden for settlement of financial obligations with SKF. We would like to know urgently whether Embassy has suitable person available. We are exploring possibility of sending representative from here, and hope British would be willing, if necessary, to delay departure of their experts for a few days to enable us to get a man to London.
[Page 659]We agree with Stockholm’s 4243 that information should be sought regarding Russian orders and requirements. It may be possible also to dispose of bearing stocks to liberated areas (e.g., the Netherlands, who have indicated desire to purchase 1,400,000 kronor of Swedish bearings).
Scheuer expects to leave for London momentarily and will be prepared to discuss further questions of settlement and disposal of bearings.
Repeated to Stockholm as Department’s 2169. [Department, FEA and USCC]