740.00112 European War 1939/10193: Telegram

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

1294. For Department, FEA, Stone8 and Riefler. Reference Embassy’s 745, January 27, and 829, January 29.9 Keller has arrived in London. He was received by Foot and Adams10 this morning and the Swiss negotiations began.

By way of describing their trip, he said delegation had encountered some difficulty in getting facilities from the Germans to cross German-controlled territory for London. He took the opportunity to discuss Switzerland’s situation as a neutral entirely surrounded by German-controlled territory, and to lament that the passage of time since the last war trade discussions in London left Switzerland still a long way from having a common frontier with us in Italy.

He elaborated upon the fact that although the power situation surrounding Switzerland had changed, it still left Germany in a very strong bargaining position there. Because of this, the ability of the Swiss to beat the Germans down on credit terms was not nearly so good now as the Swiss had hoped it would be by this time. He said he therefore wanted to urge that we give serious consideration to the Swiss request for leeway to grant the transfer guarantees up to 6 million francs per month for the first half of 1944. He said that to Switzerland’s great dismay the power situation had not yet changed to the degree hoped for by Switzerland, and that the Swiss were therefore unable to be as tough with the Germans as they would in their own interests wish to be. He said the Swiss were now negotiating with the Germans for an agreement that would reduce exports to Germany to the level of Switzerland’s December 19 agreement with us11 but that it was as impossible to make such an agreement on a month-to-month basis as it would be to treat the agreement with us on a month-to-month basis, that it was therefore necessary for Switzerland to reach an agreement with the Germans valid to June 1944, [Page 709] and that the Germans were unfortunately and unexpectedly still in a position to cut off Switzerland’s trade with the outside world, and hence in a position to insist upon the credit arrangements that the Swiss wished to meet within the 6 millions per month limit. Foot adroitly terminated this description of Germans’ power by a discussion of Switzerland’s power to cut off transit traffic to German-occupied Italy.

Keller said the Swiss wished to begin the agenda with the questions of credits to Germany and the delisting of Sulzer. The first full meeting for these discussions has been scheduled for Thursday morning, February 17.

MEW12 and EWD13 would appreciate advice regarding probable date on which Riefler and Lovitt14 will arrive in London for these negotiations. Dingle Foot inquired about this yesterday with a view to planning discussions.

  1. William T. Stone, Director of the Special Areas Branch of the Foreign Economic Administration.
  2. Latter not printed.
  3. Ware Adams, Second Secretary of Embassy.
  4. See exchange of letters, Foreign Relations, 1943, vol. ii, pp. 888892.
  5. British Ministry of Economic Warfare.
  6. Economic Warfare Division of the American Embassy.
  7. John V. Lovitt, Department representative to the war trade negotiations in London.