811.20 Defense (M) Swiss Jewels/7–245: Telegram
The Acting Secretary of State to the Minister in Switzerland (Harrison)
2212. As you are aware Dept has asked Swiss Minister42 for estimate of volume of watches and watch movements expected to be exported to US during next 12 months. This request arose from great concern of domestic industry over possibility of injury to it, particularly during period of its reconversion. Industry and Dept also concerned over apparent intention of Swiss to compete for large share of American market while at same time purposely refusing to permit exportation of watch-making machinery, to American watch manufacturers. In view of numerous instances of such refusals in recent years, for example experience of Pierre Dumaine of Waltham Watch Company in recent visit to Switzerland, and our exchanges of telegrams over last 6 months, you are fully cognizant of this situation. WPB43 has requested all possible consideration and cooperation be extended to assist Waltham, Elgin, Hamilton and Bulova in obtaining Swiss machinery.
Dept has now presented an aide-mémoire 44 regarding this matter to Swiss Minister and requests you to make representations to appropriate Swiss authorities in following sense:
- The continued refusal by Swiss Federal Department of Public Economy to permit exportation of Swiss machine tools and equipment described List VII of Swiss Watch Chamber to American watch manufacturing companies has caused considerable concern.
- These types machines essential to continued operation of American companies because of urgent need for replacements resulting from abnormal use in wartime production. They are therefore essential to our national defense. WPB recently has requested assistance of the State Dept in obtaining Swiss machinery or equipment necessary for continued operation of American companies.
- We have evidence that Department of Public Economy will permit exportation with exemption from export duty only on certification that machinery will not be used in making products for horological industry. Even more serious, however, is the circumstance that export is apparently prohibited even if American Company is willing to pay the duty. Apparent reason is desire of Swiss watch industry to restrict future American watch production by means of arbitrary trade controls. Swiss watch industry is doubtless aware that Swiss manufacturers of horological machinery themselves use certain American-made machine-tools.
- Concern recently expressed to Swiss Minister in Washington regarding future of American watch industry is based on possibility [Page 795]that injury might result from excessive Swiss exports to this country, particularly during period of American industry’s reconversion. Similarly concern over refusal of exportation of Swiss horological machinery and equipment is based on possibility of injury to American industry resulting therefrom. The American Govt finds it inconsistent that Swiss industry should expect to compete freely for large share of American market at a time disadvantageous to American producers while at same time arbitrarily refusing to allow exports of machinery to American watch manufacturers.
- In view of the above considerations it is hoped that equipment needed by American watch companies will be permitted exportation as soon as practicable.
For your information Mr. Ira Guilden, President and Treasurer of Waltham Watch Company expects arrive Switzerland in July to endeavor obtain export permits for equipment items on order concerning which Legation is familiar. Details follow by air pouch.45 In accordance with above views, please extend every appropriate assistance to Mr. Guilden who will have letter of introduction.