740.00112 EW/3–545: Telegram

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

1397. For State, Treasury and FEA from Currie. After 3 weeks of continuous negotiation with our exerting the strongest pressure against strong resistance and a stalemate yesterday, the Swiss delegation capitulated today and is now prepared to recommend to the Federal Council at an extraordinary session on Monday that in addition to the decree issued February 16 blocking Germany, which is being reinforced by additional regulations, and the decree issued March 2 prohibiting the importation, exportation and dealing in foreign currencies, they will:

Issue a decree blocking Bulgaria, Rumania, and possibly Finland. The step will mean that all European occupied countries and all Axis countries (other than Japan) will be blocked. This will be done at our request after the attitude of Russia has been ascertained. We have not pressed for the blocking of Japan in view of considerations already raised with you. We have been given to understand that Japanese assets will be blocked upon our request.
Tighten the hitherto existing controls over assets which were transferred to Switzerland by such countries and their nationals since the date of blocking (in most cases 1940) which assets have hitherto not been subject to Swiss blocking decrees;
Take a complete census of all assets held in or through Switzerland not only by Germany but by all countries now or hereafter covered by Swiss blocking decrees (this includes all European countries except the neutrals);
Reinforce measures to prevent the importation into Switzerland of assets which could have been the subject of acts of dispossession and facilitate return to dispossessed owners of any such assets found here;
Refuse to purchase any more gold from Germany except to provide funds needed to pay for prisoners of war, Red Cross, and German Legation expenses (it is expected that this will bring about the immediate cessation of standstill and other German payments to Switzerland) and;
Consult with the governments of each blocked country before the relative blocking controls are removed and be ready at any time to discuss with the USA, British, and French Governments with respect to financial questions discussed during the present negotiations.

Having presented our case individually to several members of the Council I am sanguine this will be accepted. All this has been accomplished without jeopardizing trade or transit negotiations and without any concession on our part except the general promise of more favorable consideration of Swiss requests. If this is approved by Council, bringing Sweden, Spain, and Portugal in line should prove easy and the second battle of Safehaven (Resolution VI30 being the first) will have been won.

In view of the fact that (1) the United States had initiated and approved Resolution VI, (2) there was general agreement I should try to get blocking and a census if this could be done without jeopardizing trade and transit objectives, (3) I reported February 18 (telegram 1084)31 after the blocking decree that I would try to get other implementing measures and (4) we are giving nothing in exchange over and above what we had been prepared to give for economic warfare considerations, I find your 919 March 332 incomprehensible. You will appreciate the impossible position in which the delegation would be placed if after presumably speaking for the Government I had to inform the Swiss that I would have to await the approval of Washington to the unilateral action the Swiss have taken and are preparing to take. I shall therefore assume the responsibility of concluding the negotiations [Page 784] Monday or Tuesday if the Council approves the Swiss delegation’s recommendations. In that event we shall have achieved far more than had been hoped or expected. I note your last sentence.33

On the other points the Swiss delegation is recommending as follows:

Virtually complete cessation of northbound transit traffic by placing a very broad construction on looted property. We agreed to refrain from insisting on complete stoppage under the Italian protest formula as we may shortly wish to use Swiss transit facilities ourselves.
Southbound transit will be confined to the quantities and commodities transported in February with complete stoppage of coal and iron. Remaining items which were sent you appear insignificant.
On exports Swiss have agreed to cut outstanding commitments under previous trade agreements from an estimated 30 or 40 million francs to 3 million francs to be spread over 2 months with insignificant or nil quantities of goods in which we have interest from military point of view. In addition they wish to accept new commitments up to one million francs a month in order to preserve appearance of neutrality and to get a few things like seed potatoes they need.
Stop all exports of electricity to Germany and offer 500,000 kwh a day to France if the French want and can take it.
Grant clearing payment facilities up to 250 million francs to the French.

The Swiss are pleased with the commodities and transit facilities we are offering. However, your decision to allocate no coal even for transit purposes is a great blow to them. I have explained the situation as best I could to Stucki and suggested that he accept our assurance that we will furnish some coal as soon as we are able. If this is agreeable to the Swiss Government, I shall discuss the matter with you upon my return.

Repeated to London as 713 and to Paris as 218. [Currie.]

  1. For text of Bretton Woods Resolution VI on enemy flight capital, as well as looted gold and other property, see circular airgram of August 19, 1944, 2 p.m., Foreign Relations, 1944, vol. ii, p. 218.
  2. Not printed.
  3. Not printed; it instructed Bern not to conclude agreement until Safehaven provisions had been referred to Washington for evaluation (800.515/3–345).
  4. Last sentence reads: “Freezing decree alone, of course, does not meet Safehaven requirements.”