740.00112 European War 1939/12–2944: Telegram

The Acting Secretary of State to the Foreign Economic Administrator (Crowley)

My Dear Mr. Crowley: I refer to your letter of December 29, 1944 in which you set forth certain views with regard to the economic warfare policy which should be adopted in connection with our relations with Switzerland. This whole question has received the Department’s serious consideration and as a result of the studies made the decision has been reached to adopt the following policy:

For political reasons and for reasons arising out of the benefits to us of Switzerland’s neutral position and future potential usefulness in the economy of Europe it is inadvisable to place too great pressure upon the Swiss government at this time in order to attain pure economic warfare objectives.
The change in tactics suggested by the Legation at Bern and fully supported by the British government should be adopted as offering the best practical means of achieving our economic warfare objectives.
The Swiss should be told that as the military situation changed, our economic warfare objectives likewise would change and increase; that they had not fully met our September demands10 and that in the January negotiations we would have further requests to make, particularly with respect to North/South transit traffic; that in supply and other economic matters the Swiss demands would receive sympathetic consideration in the light of Swiss willingness and ability to meet Allied demands.

The policy set forth above was not adopted for political reasons alone. Both our Legation at Bern and the Economic Warfare Division of our Embassy at London who have had long experience in dealing with the Swiss in economic warfare matters have strongly urged [Page 771] a change of tactics in the above sense as the most practical means of achieving our ends. This policy likewise has been adopted by the British government, and we shall have the advantage of the latter’s full support.

As you are aware, the Swiss have suggested that a joint Anglo-American delegation proceed to Bern to consider all economic warfare questions now in dispute between the Swiss government on the one side and the British and American governments on the other. The Department is in favor of sending such a delegation in the very near future and will suggest to the military authorities that a representative of SHAEF be included. The delegation should be empowered to treat with the Swiss government on the basis of the above policy. What may be described as the “minimum demands phase” of our negotiations with the Swiss, which, while productive of certain concrete results seems now to have outlived its usefulness and resulted in the present impasse, will be closed out by the release of a substantial portion of the supplies of our September offer. The negotiators should be empowered to proceed on the basis of the semi-annual revision of the War Trade Agreement and to offer, subject to supply considerations and military necessity, both raw materials and transit rights across France in return for export reductions in Annex I of the War Trade Agreement and in inter-Axis transit traffic with particular reference to southbound coal shipments. Conversations are already in progress between representatives of your Administration and members of the Department’s staff with respect to the relative importance to the German War effort of current Swiss exports to our enemy, and the views of SHAEF and of the British Ministry of Economic Warfare also have been requested.

I shall be glad to hear from you the names of the persons whom you wish to represent your Administration on the delegation. I count, of course, on your continuing cooperation in the forthcoming negotiations.

Sincerely yours,

Joseph C. Grew