Memorandum of Conversation, by the Under Secretary of State (Acheson)
The Swiss Minister called at my request. I read to him the principal paragraphs of the Aide-Mémoire of November 30, and handed him the paper.49 We then discussed the situation for some time. The Minister made the following points.[Page 801]
1. The Minister stated that he had hoped that the situation could be worked out by direct talks between the Swiss Watch Industry and the American Watch Industry, but that he had been informed that any such discussions would be regarded by the Department of Justice as in violation of the Anti-Trust Act.50 I said that I was not informed about this, but that I could well see that the Department of Justice might properly take this position.
2. The Minister said that the Swiss Government had gotten the impression from statements made by American representatives of the Watch Industry in Switzerland that the request for a limitation of imports was connected with the request for the release of certain Swiss watch-making machinery and that, if the release were granted, the request for the limitation of imports would be dropped.
I said that this was not the case and that, while the matters were quite separate, we felt that the Swiss had not been cooperative in regard to the machinery.
3. The Minister claimed that, without any limitation of imports, the American Industry could make and sell watches up to the full capacity of its plants.
I told him that we did not share this view—for one reason, because I understood that the capacity of the watch-case makers had been fully taken up by importers of Swiss watch movements.
I explained to the Minister that, in connection with the passage of the Trade Agreements Act,51 the President had assured American industry that it was not his intention that any industry or portion of an industry should suffer injury through the administration of the Act. The American Watch Industry had been diverted to war production during the war and was experiencing difficulty in returning to its peace-time production by reason of the very great volume of Swiss imports. It seemed to me that the long-run interests of both countries would be furthered if a reasonable attitude were taken so that the American industry might get back to producing the comparatively small portion of the American consumption of which it was capable. Any other attitude would produce bitterness and resentment and might well cause the Congress to take action which would not be carefully adjusted to the situation.
The Minister agreed to report to his Government and to discuss the matter further.