740.00112. European War 1939/M019: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received June 15—7:27 a.m.]
4774. For Department, FEA and Riefler from Lovitt.
1. During present negotiations the possibility of listing Swiss firms whose exports are not covered by December agreement has played a part in discussion of desired export ceilings. We have tended to withhold listing such firms in anticipation of reasonable ceilings which seemed possible of attainment.
2. Our demands on the Swiss Government with respect to drastic cuts in exports on items on Annex I of December agreement were made through Legation May 25. Communications from Bern at first seemed to be that Swiss Government might come at least part way to meet us but later telegram received by MEW indicate that Swiss may play for time. We now anticipate that Swiss Government will delay any definite reply because dislocation of French railways will detract from value Swiss may attach to quotas for raw materials which may be prepared to open.
3. Such anticipated delay should be avoided if possible. If Swiss delay their reply until end of month we may find ourselves in awkward position. We will then be faced with either repudiation of the December agreement or continuation (involving continuation of the food and fodder quotas). While there is no indication that Swiss might withdraw their March 23 proposal, transport difficulties across France may make the food and fodder quotas less attractive and therefore make the Swiss less likely to cede points which we hope to get coincident with the extension of the December agreement. (Embassy’s 4091, May 21 [20]54).
There is also distinct possibility once the December agreement is continued Swiss may consider our goodwill is relatively assured and have little incentive accede demands with respect to priority items in consideration of import quotas for industrial raw materials which they may not be able to import for some time.
4. In an effort to prevent Swiss Government from feeling secure in delaying their reply it may be necessary to resort to listing or threats of listing.
5. Under the December agreement we may not list firms in the metallurgical industry solely for exporting items covered by that agreement so long as ceilings are observed.
[Page 730]6. Before listing firms in the metallurgical industry for exporting items not covered by the December agreement, we must first ask the Swiss Government to impose a ceiling, it not to take effect however until July 1, 1944 unless the undesirable export was abnormal during the first half of 1944.
During the present negotiations, we asked Keller for a general formula designed to prevent abnormal developments as compared with recent years. This requested formula covered exports of the metallurgical industry other than those specified in the December agreement. We regard this request for a formula as a request for a ceiling within the spirit of the December agreement and therefore consider ourselves free to list such firms after July 1, 1944 if formula or equivalent ceilings are not put into effect by that time.
In cases where the export of such an item was abnormal during the first half of 1944 we would consider ourselves free to list now.
7. With respect to firms other than metallurgical firms, we have always been free to exert listing pressure.
8. We now propose to inform the Swiss Government of the position we take with respect to listing and say that we plan to list for substantial increases in exports to the Axis or for supplying some new enemy deficiency and express our sincere hope that an early satisfactory reply to our priority demands and to our request for ceilings may make the renewal of listing pressure unnecessary. In this connection our request for ceilings, refer to the request for a general formula applying to metallurgical exports referred to in paragraph 6 above and to limitations on other Swiss exports requested by United States during the negotiation (including requested additions to the A list or nil quotas) and sent you in our despatch No. 15339 of May 1.55
9. If you approve of the lines suggested in this telegram please authorize our Minister in Bern to associate himself with his British colleague. Since we have not been able to obtain Swiss trade returns due to ban on secret communication, Bern should be requested to report significant developments.
Sent Department; repeated to Bern. [Lovitt.]