740.00112 E.W./2–1945: Telegram

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

1087. For Department and FEA from Currie Mission. In draft agreement presented to Swiss at preliminary meeting provision was included for complete termination of exports from Switzerland to Germany. No subcommittee was appointed for this question since we wished to obtain principle by complete cessation rather than discuss individual exports; however in meeting of committee on Swiss requirements Swiss representatives put forward counter proposals. They indicated that since February 1944 all payments in German Swiss clearing have been balanced including invisible items; proportion of latter has steadily increased, now amount to about 8 million francs monthly. Since October 1944 Swiss have required Germans to complete deliveries to cover invisibles before granting new transfer guarantees and have approved guarantees only to extent of German deliveries in excess of invisibles. December imports from Germany amounted to 19 million francs, export guarantees only 1 million francs. In January export guarantees were 4 million francs. Total exports approved are distributed proportionately among different industrial [Page 781] associations and by them among individual firms. Swiss contend this insures adequate spread of exports.

Swiss counter proposal involved maintenance and possible extension of a list agreed in London in 1944; new reductions in ceilings for Annex I; and agreement to spread remainder among all remaining tariff items. Major reductions in Annex I proposed by Swiss were as follows: (read in three columns tariff item, quota for Germany, quota for other Axis in thousand francs) 753/756 1250 15; M 6 4000 200; ex M 6 (wood working) 300 nil; ex 954A (radio sets for civilian use) 80 5; 747 100 5; 935 D and 937 300 30; 937 402 30; 947 74 10; M 4 400 625; M 9 2248 (not more than 500 machine parts and 500 material testing and foundry machines) 210; MDY 2026 600; 956A/–F1896 200; total Annex I 19212 3410.

We indicated we considered it impossible to discuss less than complete cessation since changing German needs at present stage of war made individual priorities and ceilings irrelevant. Swiss emphasized importance of supplies still received from Germany and admitted this was sole consideration; however we feel these supplies are of such small value and so unreliable as to be of negligible importance. Moreover fact that Germans continue to export to Switzerland despite necessity of covering invisible items before receiving any Swiss supplies indicates continuing importance of latter. Question to be discussed further at high level with Swiss after examination of latest import and export statistics.

Repeated London 542. [Currie Mission.]