740.00112 European War 1939/10407: Telegram

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

2383. For Department and FEA. Late this afternoon Swiss presented memorandum of proposals for further reduction of exports of [Page 710] items covered by Annex 115 of agreement of December 19 for second half 1944. Exports to Germany including Poland and Alsace-Lorraine have been reduced from 20% of 1942 to 15% of 1942 in case of following items: 811/813 arms and parts, 1083/84 ammunition, 809A1/A3 ball and roller bearings, M6 machine tools, 948A fuses. Swiss state this represents reduction of approximately 13,000,000 francs. For other Axis Europe arms and parts reduced to 15%, ball and roller bearings group remains same (20%) M6 to 15% representing total reduction of 2,316,000 Swiss francs. On fixed quotas for Germany dynamo electric machines reduced to 4,000,000, M4 steam engines reduced to 794,000, total reduction 2,706,000. For other Axis countries MDY reduced to 5,576,000, M3 to 2,000,000, M5 to 5,000,000 of which not more than 3,000,000 diesel engines, total reduction 1,724,000.

Swiss state that in putting forward these proposals they expect:

That article 7 of the December agreement will be revised in accordance with discussions which took place on this subject:
That article 8B will be modified as follows: “For tariff items covered by Annex I to one-half of the global value of their exports in 1942”.

Swiss memorandum continues

“Furthermore in view of the substantial reduction of Swiss exports of machinery to Axis countries already agreed upon in December 1943 and of the new concessions as outlined in the annex attached to the present memorandum (those given above) Swiss delegation would expect:

His Majesty’s Government and United States Government to make full use of existing possibilities of imports of Swiss machinery and instruments within the framework of the compensation deal;
His Majesty’s Government and United States Government to place such orders for after-war deliveries as to assist the Swiss Government in their endeavor to overcome the difficulties deriving from the above mentioned export reductions.”

Swiss desire to modify article 7 to give more flexibility but agree to prevent concentration upon any particular article of manufacture. They point out that except for tariff items 753, 809A1/A3 and part of 747, annual quotas to manufacturers are not allotted by Swiss Government but by industrial groups and these groups allot quotas on a flexible basis. An elaboration of this point is covered in Embassy’s despatch 14615 of March 23.16

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Complete Swiss memorandum is being sent you by air pouch.17 We have not yet had an opportunity to study memorandum but desire you to have substance in time for Friday’s meeting. Our comments will follow.

  1. Not printed; it listed tariff items in six groups with quotas for exports to Germany and other Axis countries.
  2. Not printed.
  3. Despatch 14640 of March 24, and enclosed memorandum of March 23; neither printed.