Foreign Relations of the United States, 1948, Western Europe, Volume III

840.50 Recovery/4–2948

Memorandum of Conversation, by Mr. John W. Auchincloss of the Office of European Affairs

Washington, April 29, 1948.

Participants:	Mr. Bruggmann, Minister of Switzerland
	Mr. Conklin, WE
	Mr. Auchincloss, EUR

Mr. Bruggmann came to the Department, at his own request, to discuss the notes which are to be exchanged between the United States and Switzerland to satisfy the requirements of section 115 of the Economic Cooperation Act.

The Minister had received copies of the draft notes approved by Mr. Hoffman on April 14, and he had heard from his government that the text of the proposed reply note raised certain difficulties. These he discussed in some detail. The difficulties seemed to center around two main points.

In the first place, there is a fundamental difference between the Swiss and American conceptions of the “assistance” to be furnished under the Act. In the Swiss view, assistance refers only to various types of financial aid, and since Switzerland needs none of these, the Minister regards his country as in a special category. He maintained that Switzerland was not a recipient country, but a contributing one only, and that since no assistance would be furnished to Switzerland, it was not necessary for his government to give the assurances which the Act requires as a condition of eligibility for assistance. It was also his position that there would be no occasion for a bilateral agreement until the need for assistance became apparent, Mr. Bruggmann stated that his country asked for nothing under the Act but the continuance of normal trade relations, and that he hoped Switzerland would be able to obtain all it needed in the normal practice of commerce, as had been the case up to now.

The Minister was told that the American position was quite different from this, and that under the Act “assistance” covers the performance of many functions besides financial aid. For example, it includes various services of procurement, shipping and allocation, and section 112(g) even establishes an export priority in favor of the participating countries. Since it was expected that Switzerland would receive allocations from the Administrator, and possibly other services as well, it was the American view that Switzerland would in fact be receiving assistance, although of course not on the same scale as many of the other countries. This assistance, however, could not be supplied until the requirements of section 115 had been satisfied. It was further pointed out that we did not consider Switzerland’s position unique, since we regarded all participating countries as being both contributing and receiving countries, although of course in varying degrees. We could not be sure that Switzerland would be able to obtain requirements in the normal pattern of trade; that pattern had been changed in favor of a coordinated supplying of European requirements, and if a country did not take advantage of the priority status given by the Act, it would run some risk of obtaining less than it would like to have.

The second point which troubles the Swiss is one which involves their status of neutrality. The draft presented to them requires Switzerland (like all the other participating governments) to adhere to the purposes and policies of the Act. This would involve acceptance of the policy, which is stated in sub-section 102(a), “to sustain and strengthen principles of individual liberty, free institutions, and genuine independence in Europe”. The Minister stated that the Swiss Government could not officially adopt a policy of this kind, because that would be a departure from neutrality, and would expose his country to pressure from the Soviet Union for agreements containing commitments far more extensive than Switzerland would like to make. He felt that adherence to this policy would give a political character to his country’s participation in the recovery program, and he declared that Switzerland could go no further than she had in the recent Convention at Paris of April 16, in which her freedom of action and right to abstain from questions which do not interest her are assured by article 14. The Minister stated that his government was in complete sympathy with the program, but in signing any document it would have to secure full protection for its special position.

In reply to these points the Minister was told that it was surprising that a question of neutrality should be raised by adherence to the purposes of the Act. However, the signing of the Paris Convention could not be taken as a compliance with the requirements of section 115, because the Convention is an agreement to establish an organization and to define relations between the participating countries in Europe, whereas the bilateral agreements are intended to define relations between the United States and each individual participating country.

The Minister had with him a tentative draft note which varied in three main points from the American version.

a. The Swiss Government accepted the purpose of the Act “in principle”. The Minister was told that this was less than a complete adherence to the purposes and policies of the Act; the note would therefore be inacceptable, since it could not provide a basis for the necessary finding by the Administrator.

b. The draft stated that Switzerland would consider the conclusion of a bilateral agreement if the need of assistance should make it necessary to do so. This language was also inacceptable, since it expressed something less than a clear intention to conclude the necessary agreement.

c. The Minister expressed the hope that Switzerland would continue to receive its fair share of materials from the United States in the framework of normal trade and on the same basis as the participating nations. The Minister was told that we did not share this confidence, and that if the Swiss should make such a statement, we would probably be obliged to make a correcting statement in reply.

The Minister regarded the note as only a preliminary version and had no particular desire to leave it in the Department. He was told that we also preferred him to keep the note, so that any changes in drafting to be considered later would be variations from the American version, rather than from the one he had brought with him. As things were left, the Minister was told that the Department would give full consideration to his points and try to find some mutually satisfactory language. At the same time, there could be no substantial deviation from the American draft, because that draft reflected the minimum requirements of the Act.