740.00112 EW/1–1145: Telegram

The Chargé in Switzerland (Huddle) to the Secretary of State

207. Department’s 135, January 9. British Legation having received instructions similar to those contained in Department’s telegram under reference Secretary Altaffer and British Commercial Secretary called on Doctor Hotz7 of Swiss Commerce Division today and conveyed sense of Department’s message.

Hotz freely discussed with them aims of present Swiss negotiations with Germans and he expressed rather urgent interest in learning items of undesirable exports which Americans and British wished to have reduced. He stated that they were exacting hard terms of the Germans and they anticipated no important commitments to Germany. Swiss need for raw materials such as coal and iron was great and naturally if Germans could guarantee to supply these they were prepared to give them Swiss goods. He pointed out that any agreement made with Germany would stipulate delivery of goods to Switzerland before export licenses would be issued against them. Swiss expect to confine exports to Germany to goods paid for in clearing and export licenses will not be issued for merchandise purchased out of free francs.
Hotz indicated that Swiss imports from Germany were as follows: October, 26 million francs, November, 31 million francs, December, 20 million francs. New transfer guarantees for exports to Germany, on the other hand, were as follows: October, nil, November 5.5 million francs, December, 2 to 3 million francs.
The Swiss intend to negotiate an agreement nominally for a period of 6 months but they do not propose to be bound for longer than 1 month. They will stipulate an escape clause similar to the one included in last September’s Swiss German agreement. Prolongation of existing agreement after January 15 will probably be formal and [Page 769] bilateral although Swiss may unilaterally require payments into national bank until new agreement signed.
Referring to approaching negotiations with United States for extension of agreement of August 14, 1944,8 Hotz stated that naturally the 3 new items for which they had established nil quotas as of January 1, 1945, i.e. diesel engines and parts position M 5, steam locomotives position 883 A, and motor vehicles tractors and parts position 914 A/G, would automatically be included among nil quotas in new agreement.
Instruction urgently requested as to items of exports to Germany and other Axis which Department is most interested in having reduced so that this may be communicated to the Swiss in time to receive consideration in their negotiations with Germans.

See British Legation’s Arfar 25, of this date repeated to British Embassy Washington as number 1.

Repeated to London as 76.

  1. J. Hotz, Director of the Division of Commerce, Swiss Department of Public Economy.
  2. See ( Foreign Relations, 1944, vol. iv, pp. 758760.