854.24/31
Memorandum by Mr. Roy Veatch of the Office of the Adviser on International Economic Affairs
Representatives of the other interested agencies of the Government, as well as members of various divisions in the Department of State, met with Mr. Sayre on the afternoon of May 1 to discuss a confidential mission being undertaken in this country by representatives of the Government of Switzerland. The Minister of Switzerland, Mr. Marc Peter, accompanied the special representatives of his Government, Dr. Felix Somary, a confidential economic and financial adviser of Federal Counselor Obrecht, the chief of the Swiss Federal Department of Public Economy, and Mr. Ernest Liechti, director of the Swiss Cooperative Society of Cereals and Fodder Materials. The following officials of this Government were present:
- Mr. F. H. Rawls, Assistant Director, Bureau of Foreign and Domestic Commerce, Department of Commerce;
- Mr. Louis Domeratzky, Chief, Division of Regional Information, Bureau of Foreign and Domestic Commerce, Department of Commerce;
- Mr. Leslie A. Wheeler, Chief, Foreign Agricultural Service, Department of Agriculture;
- Mr. Huntington T. Morse, Assistant to the Chairman, United States Maritime Commission;
- Mr. Francis B. Sayre, Assistant Secretary of State;
- Mr. Herbert Feis, Adviser on International Economic Affairs, Department of State;
- Mr. Paul T. Culbertson, Assistant Chief, European Division, Department of State;
- Mr. Jacques Joseph Reinstein, Division of Trade Agreements, Department of State;
- Mr. Roy Veatch, Office of the Adviser on International Economic Affairs, Department of State.
At Mr. Sayre’s request, Dr. Somary summarized the principal features of his mission, in much the same terms as set forth in the background [Page 859] memorandum1 furnished those present in advance of this discussion. He stressed particularly the difficulties which would be experienced by Switzerland in securing essential foodstuffs and raw materials in the event of a general European war, the desire of his Government, therefore, to secure binding contracts for the supply of American commodities during such periods and the chartering of American vessels for the transportation of these commodities, and the hope that this Government would be able to offer some assurance that the fulfilment of such contracts would not be made impossible by Government action.
Dr. Somary recognized that this Government could not be fully committed in this respect unless an agreement were to be drawn up and approved by Congress. Since his Government was anxious to avoid all publicity regarding the matter, however, a treaty is out of the question and he desires to secure, therefore, merely a statement of policy or intention on the part of the Executive.
Following Dr. Somary’s summary Mr. Sayre expressed what he was sure would be the sympathetic interest of this Government and its desire to cooperate in whatever way would prove to be possible. It seemed to him, however, that it would be impossible for the Executive to make any binding commitments if the possibility of a treaty is to be ruled out; not only would the Executive be unable to control Congress, but the present Executive would be unable to control the next Executive. Mr. Sayre asked, therefore, whether it would not be desirable, from the standpoint of the Swiss Government, merely to seek a mutual understanding of the problems and needs outlined by Dr. Somary and of the position of each Government with respect to those needs.
Dr. Somary understood that the Department of State would be unable to make any binding commitments, but he expressed the hope that the Department, and eventually the President, would be prepared to make a declaration that, so far as it would not be prevented by law, the Executive would allow these contracts to be carried out. Dr. Somary felt that if his Government had some such statement as this from the Department, with the President’s approval, he would consider it worth while to go ahead with his program of securing contracts with American concerns. He suggested further that each contractor should furnish the Department of State with a copy of the contract so that the matter might be brought directly to the attention of the Department; this would be done without any knowledge on the part of the contractors of the discussions or understandings reached with the Department of State.
[Page 860]Mr. Sayre pointed out that the entire subject of the neutrality legislation was under consideration in Congress at the present time and that the President would be in no position to say what American policy will be until this question is decided. At this point Dr. Somary made it clear, however, that he desired no commitments with respect to laws, but only a declaration that, so far as the President would have executive discretion, he would refrain from placing impediments in the way of the contracts to be negotiated by Switzerland.
Mr. Sayre then asked if the best arrangement would not be for the Government of Switzerland to inform the United States Government of the contracts which it negotiates, expressing the hope that so far as possible any action would be avoided that would prevent the fulfilment of these contracts. He went on to say that in its reply this Government would take note of the information supplied by the Swiss Government, might express the sympathy and goodwill of the United States toward Switzerland, and then might say that, in the event of general warfare in Europe, this Government would hope to assist the Swiss Government, in connection with its supply problems, in such way as would prove possible.
Mr. Sayre and Mr. Feis spoke in favor of such an arrangement in preference to any “understanding” which might be considered secret and be misinterpreted by Congress. In Mr. Feis’ opinion the contracts with private American interests would almost surely become known to the press so that secrecy would be impossible in any event.
There was general agreement on the part of the representatives of this Government present that such an exchange of communications would be the best way of handling the problem. Mr. Sayre expressed the opinion that in any event the Secretary and the President would not wish to go further.
Dr. Feis suggested that from the point of view of Switzerland greater certainty with respect to necessary supplies might be achieved through the creation of reserve stock-piles of required commodities in Switzerland. In commenting on this suggestion Dr. Somary pointed out, however, that the Swiss Government under its constitution has no authorization to buy goods and thus to engage directly in trade except in time of war. He felt that his Government would not wish to raise the constitutional and political questions involved at the present time, especially in view of its desire to avoid publicity. Furthermore, he pointed out that there is no further storage space available in Switzerland, or in France for that matter, and that therefore stocks acquired would have to be warehoused in the United States.
At Mr. Sayre’s invitation, Dr. Somary next outlined or summarized the plan to secure option contracts for the chartering of American vessels, especially tankers, in time of war. He said that his Government [Page 861] had already made inquiries in order to learn what vessels might be available in case of a European conflict and had found that British, Dutch, and French vessels would be available only for the carriage of goods exchanged between these countries or their dependencies and Switzerland. It had been learned that only the Greek and Norwegian merchant marines would be available, and his Government feared that Greece might become involved, leaving only Norway as a source of supply. Since his Government would be in particular need of tankers to transport the all-important petroleum products, it was particularly anxious to make all necessary arrangements in the United States. His Government was particularly concerned regarding the availability of such vessels in the event that the American Government should follow a “cash and carry” policy as a means of protecting its neutrality in time of war or in the event that the United States should become engaged in war and therefore impose restrictions upon the use of American shipping. He also mentioned the desire of his Government to operate the chartered American vessels under the American flag, at least to the extent that these vessels would be engaged only in the transportation of American goods; otherwise it would be necessary to place the American vessels under another flag, which would be unwelcome from the point of view of the Swiss Government.
Mr. Sayre again mentioned the fact that neutrality legislation is still under consideration; it was still too early to know what form this legislation would take, but he would not be surprised if the “cash and carry” policy should be continued. Until this legislation was decided upon, he felt the President could not commit himself, and that even then there would be the undetermined problem of our own needs for tonnage in the event of war. Mr. Sayre went on to say, however, that it would not necessarily be impossible for Switzerland to secure American shipping in times of emergency, for there would always be considerable pressure here to sell American surpluses abroad, the neutrality or shipping policy of this Government might be reconsidered, and in any event no doubt more ships would be built in time of need.
Mr. Morse added that American ships would probably be required to carry essential imports to the United States, and that therefore tonnage might be allotted to neutrals for exports from this country so that the vessels would not have to go in ballast on the outward journey. He went on to say, however, that it would be impossible to make advance commitments on tonnage. There is a statutory provision2 that [Page 862] the Maritime Commission must approve the charter of vessels or the transfer of flag for any period longer than twelve months.
Dr. Somary was asked whether the Swiss Government would be prepared to offer guarantees that the supplies secured from this country would not be transshipped to belligerents. In reply he said that his Government would be prepared to guarantee that not a ton of these supplies would reach a combatant; its good faith could be tested by reference to the amounts of each commodity required, which obviously would be sufficient only to meet the minimum needs of Switzerland.
Mr. Domeratzky inquired as to whether the Swiss Government could guarantee that imported supplies would not be confiscated by the government through whose territory they would be carried from the port of arrival. On this point Dr. Somary said that of course his Government would be in no position to offer guarantees. His Government anticipated no difficulty, however, since the French Government, which would make a port available to Switzerland, had raised no difficulties during the last war when Swtizerland had secured its supplies through the French port of Cette.
Mr. Sayre suggested, and it was agreed, that the problem of shipping might be covered in a general way in the suggested exchange of notes between the two Governments. He added that whatever was said in these notes would not be of great importance in any event. The important thing was that the Swiss Government could count upon a cooperative spirit on the part of the American Government and people. He would expect that when hostilities should break out, representatives of the two countries would get together and work out ways and means of getting American surpluses to Switzerland.
It was agreed that an exchange of notes, following the lines suggested, should be drafted for consideration by Dr. Somary and the Swiss Minister and by the Department.