740.00112 European War 1939/10469: Telegram

The Minister in Switzerland (Harrison) to the Secretary of State

2042. The following telegram has been sent to London.

527, April 3, 10 a.m. At the meeting of the Mixed Commission March 30 Swiss representatives emphasized that the restriction on exports to Germany and the Axis countries would in the absence of an increase in exports to other countries create a serious labor problem. They estimated that the Swiss-German agreement might throw 30,000 out of work. They expressed the hope that we would make fullest possible use of Compensation Agreement and of the five new tranches now accorded. They stated they understood British authorities were willing to allow more orders to be placed in Switzerland for civilian consumption provided equivalent compensatory imports were not required. They mentioned the possibility of British purchases of spare watch parts for civilian needs under tariff item 934A to the approximate value of 500,000 Swiss francs.

The Swiss suggested that consideration might be given to according facilities for importation of raw materials of secondary priority (they mentioned cotton) in compensation for exports for civilian consumption.

Commercial Attaché and his British colleague stated that they were without any information on this matter which they pointed out would have to be discussed in Washington and London. In so far as the Swiss proposals for compensatory imports might relate to exports for civilian requirements in excess of existing quotas under the Compensation Agreement, Commercial Attaché and his British colleague agreed to recommend the matter to Washington and London for sympathetic consideration.

With regard to the more general question of an expansion of Swiss exports to offset losses through reduction to the Axis, Commercial Attaché and his British colleague expressed their sympathetic appreciation of this situation but pointed out that both the demand for Swiss goods and the supply of compensatory materials must be governed by the priority requirements of our war effort.

Repeated to the Department as 2042.