800.515/3–2245: Telegram

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

2950. From Hawkins30 and Stone,31 Safehaven. Reference Department’s 1730, March 7.32 In view of fact that following communication from Foot33 raises important political and economic policy questions, this telegram should be called to the particular attention of Clayton34 and Dunn.35 Because of their recent experience in Swiss negotiations, we suggest that Currie, Orvis Schmidt and Ordop [Gordon?]36 be consulted.

Following is text of Foot’s letter to Stone dated March 21:

1.
We have now considered together with the other interested departments the proposals regarding Safehaven in Sweden put forward by the State Department in their telegram of March 7. Our views are as follows:
2.
As we have already discovered in Switzerland proposals of this kind affecting the banking practices of neutral countries are apt to encounter very stubborn resistance. As a matter of tactics, it is generally advisable to proceed step by step. We think, therefore, that the best course would be to follow the Swiss precedent and press for a complete census of all Axis assets or if the Swedes prefer it of all foreign assets together with blocking measures of their equivalent. The Swedes have already gone a long way in this direction and I do not think we should have great difficulty in persuading them to go as far as the Swiss. But a demand for a full disclosure at this moment would, we think, lead to a prolonged wrangle and would be of no particular advantage since even if our demand were granted, we could make no use of the information at the present time. Our view is that we should seek an agreement on the Swiss model with all the neutral countries. Thereafter, when the Germans have unconditionally surrendered and the United Nations will presumably be in a position to acquire if they so wish legal title to German assets abroad, we shall be in a strong position to require the governments concerned to reveal to us the information they have accumulated.
3.
So much for our general view. As regards the detailed proposals our comments are as follows:
3.(a)
We, of course, agree with the aim of paragraph 6. In the second sentence,37 however, we should prefer to say that the principles [Page 866] on which transactions shall be licensed will be a matter for agreement between the governments concerned. This would mean the same thing but would probably be much more palatable.
3.(b)
We are not at all happy about the proposal in paragraph 5 that the Swedes should provide our governments with full information concerning the movements since 1939 of Axis nationals in Sweden and of persons who come from countries now or previously controlled by the Axis. In the first place, the volume of such information would be enormous and much of it would be of little value. Secondly, we hardly feel that this is an appropriate subject to be dealt with in economic negotiations. Thirdly and most important of all, it occurs to us that “countries previously controlled by the Axis” would include the Baltic States and Finland. If we were to obtain information regarding the refugees from these countries, we could hardly refuse to make it available to the Russians. This might well lead to a demand on the part of the Russian Government that these persons should be handed over. I am sure that you as well as we would prefer that such a situation should not arise.
3.(c)
We agree as I have said regarding the proposed census of all enemy assets. We doubt, however, whether we should endeavor to enumerate such assets in our opening proposals. It would, we think, be sufficient to open with a request that the Swedes should adopt much the same formula as the Swiss and then to elaborate the categories of assets during the discussions.
3.(d)
As regards the proposed arrangements under paragraph 2 for licensing in accordance with arrangements provided for between the governments, please see the alternative formula I have suggested above.
3.(e)
As regards the offer to provide the Government of Sweden with the services of technical personnel, we doubt whether this is necessary or whether it would be wise to suggest it. The Swedes would almost certainly reply that they are fully capable of enforcing their own laws without assistance from foreign governments.
3.(f)
Paragraph 9 seems to us to present certain difficulties. We could hardly claim the United States or the United Kingdom have an exclusive interest in the adoption and the full execution of this agreement without bringing in the other United Nations. Moreover, we do not see much advantage in this provision. If the United Nations become the possessors of German assets abroad, we shall, of course, have an interest in their disposition. The second part of the paragraph [which?] deals with the submission of information to our governments by Swedish nationals is, we think, open to strong objection. The Swedes have always shown themselves extremely sensitive regarding communications of this kind. They have made it an offense for Swedish firms to supply our representatives engaged in Black List38 work with information as to their trades. I do not think there can be the slightest doubt that they would reject this demand and that by insisting on it we should jeopardize the whole of the negotiations.
3.(g)
As regards the adoption of Bretton Woods Resolution No. 6 (see paragraph 1) we agree that this is one of the requests which should be put forward. But we feel that as in the case of Switzerland it does not greatly matter whether the Swedes accede to the actual text of the resolution provided that we obtain the substance.
4.
It seems to us that the best course would be to follow much the same procedure as in the recent Swiss negotiations. In other words we should appoint delegations with general instructions who would be given authority to make the best possible agreement. This arrangement in our view worked admirably in Bern and we see no reason why it should not obtain equally satisfactory results in Stockholm. It would of course also be necessary to empower the delegations to reach agreement on basic rations, post hostilities allocations and minor amendments to the draft tripartite agreement.
5.
If your Government agrees we shall be prepared to fall in with their suggestion and send a delegation to Stockholm in the near future.
6.
It will, of course, be necessary to consider the position of the Russians and the French. We think the best course would be to inform the French and Soviet Governments of our intended negotiations and leave it to them to suggest or refrain from suggesting that French and Soviet representatives should take part in the discussions. (End of Foot’s letter).

British informed us after receipt of their answer that it applies not only to Sweden but to all the neutral countries (including Spain). (Foot’s letter covers not only Department’s 173039 but also Department’s 2099, March 17, 2016, March 1540 and 2111, March 19.)

Embassy believes that British answer discloses following two main divergences between Department’s 1730 and British views: (a) British feel that request for disclosure of census and freezing information should come after we occupy Germany, (b) British do not believe that we should ask for information on persons and in any event such request should not be made at this time. Because of overriding desirability of obtaining a joint United States–United Kingdom Safehaven program these differences should be resolved if at all possible. Accordingly Embassy makes following observations:

(a)
British view against requesting full disclosure of freezing and census information is based on timing and tactics and does not appear to constitute any major difference in principle. Accordingly our authorities might wish to consider: Firstly, obtaining British agreement that both Governments will jointly support a request for such information at an appropriate later date. Secondly, in order to prevent any subsequent neutral argument based on estoppel, neutrals should be informed verbally during negotiations that we shall request full information at a later date.
(b)
If our authorities feel that notwithstanding paragraph 3(b) of British answer Sweden should be requested for information on Axis and other related persons such request could be deferred to a later date. Perhaps Department will wish to instruct Embassy to seek British agreement to ask Sweden to make information about [Page 868] specific individuals available at our request. If British object to this demand being associated with economic discussions the approach on this one point could be separate but simultaneous and made jointly by American and British Ministers. Embassy understands that Swedish control of all aliens in Sweden is so thorough that Swedish Government undoubtedly has requisite information available at any time.

Embassy believes that British answer does not arise from any lack of appreciation of importance or urgency regarding Safehaven and that divergences are mainly the result of genuine differences in tactics and timing. British strongly believe that we shall gain more in negotiations with neutrals by not asking too much and they feel that we should not get into the position of giving way on substantial points thus jeopardizing obtaining such objectives at a later date. Moreover, British repeatedly emphasized in our conversations with them that ultimately we can accomplish far more if we enlist neutral cooperation at the outset rather than force neutrals into unwilling compliance with our demands.

Sent to Department, repeated to Stockholm as 269. [Hawkins and Stone.]

Winant
  1. Harry C. Hawkins, Counselor of Embassy for Economic Affairs, London.
  2. William T. Stone, Director of the Economic Warfare Division of the Embassy in London, and Special Adviser to Ambassador Winant.
  3. See footnote 21, p. 862.
  4. Dingle Foot, Parliamentary Secretary, British Ministry of Economic Warfare.
  5. William L. Clayton, Assistant Secretary of State for Economic Affairs.
  6. James C. Dunn, Assistant Secretary of State for European, Far Eastern, Near Eastern, and African Affairs.
  7. Presumably David L. Gordon of the Foreign Economic Administration.
  8. The context was concerned with control of transactions involving Swedish nationals and those of Axis or Axis-dominated countries; the sentence under reference read: “The licensing of transactions shall be in accordance with such arrangements as are provided for by the Government of Sweden in agreement with the United States and the United Kingdom.” (800.515/3–745)
  9. i.e., British Statutory List, the equivalent of the American Proclaimed List.
  10. See footnote 21, p. 862.
  11. Telegram 2016, March 15, not printed.