740.00112 European War 1939/10603: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received 11:48 p.m.]
3268. From the Ambassador and Riefler. Reference Embassy’s 3168 April 18.18 British Government views on listing of SKF are given in letter quoted below from Lord Selborne, Minister of Economic Warfare, to Riefler:
“I promised you that after consulting my colleagues I would let you know our views on the proposal the United States Government have made to us that if the Swedish Government refuse our request for an embargo on the export of ball bearings to the Axis we should at once threaten to put SKF on the Proclaimed and Statutory Lists.19 I need hardly say that my colleagues and I have given this matter our most earnest consideration, but I am afraid that as at present advised I could not agree to the proposition in the form in which you have made it.
In our view it would be a fatal blunder to make such a threat at this moment. All those who have intimate knowledge of Sweden advise me that there would be every likelihood of the Swedes reacting most unfavourably. One must never lose sight of the fact that the smaller European nations, especially those who have so far successfully resisted Hitler’s attempts to dominate them, are touchy on the point of threats to an extent that amounts almost to an inferiority complex. I would therefore ask you to use every effort to persuade the United States Government against adopting this course. I need hardly say that I have welcomed and vigorously supported the suggested offer to purchase the entire output of SKF during 1944 and [Page 516] 1945, and I think that this would be an exceedingly wise step. It is against the double-handed approach that I feel so strongly. In all things we wish to act with the United States Government, but we are bound to say quite plainly when we think a grave error is contemplated. I was considerably disturbed at the suggestion that was made that, in the event of the British Government refusing to associate itself with a black listing threat at this juncture, the United States Government would be prepared to act unilaterally. That, I am afraid, would not alter our attitude, and the result would be very unfortunate.
If, however, your Government would agree to approach the SKF purely from the business angle, without any threats, I quite agree that in the event of SKF turning the offer down we ought to consider whether it might not be right to black list the firm. I would even be prepared to agree to a time limit being placed on SKF’s answer, though I would deprecate that course at the moment, and the time limit, if imposed, should be a reasonable one. If all these efforts fail, then I agree we may need to consider the question of black listing. In my opinion, however, this would be a most serious step to take.
I do not stress the question of the supplies the British Government is at present receiving from SKF, which would of course immediately terminate. Of even greater importance, in our view, is the possible effect on supplies to the enemy. Under present arrangements, as you know, such supplies are severely limited. The contracts with Germany and other Axis countries amount to just over 26 million kronor and cannot under the terms of the War Trade Agreement exceed 29 millions. The Swedes promised us—and we have no reason to think that the promise is not being kept—that no more than about one-twelfth of the annual quota will be exported in any one month of 1944. In addition a considerable amount of the SKF capacity to produce the special types of bearings needed for aircraft is engaged in fulfilling our own preemptive orders placed last year. The present position therefore is that the Germans cannot obtain from Sweden more than 2,416,000 kronors’ worth of bearings a month and that under existing commitments it will not be more than 2,166,000 kronor. The possibility of concentrating on special types of bearings is limited by our own preemption and by the undertaking that the switching of orders will not be allowed except for such minor variations as are normal in the trade.
In the opinion of His Majesty’s Government we cannot rule out the possibility that the Swedish Government would treat the black listing of SKF as being in effect, a breach of last year’s War Trade Agreement and that they would repudiate the Agreement. We do not say that this is the most probable result and no doubt the Swedes would hesitate before doing so. But as you know, the Swedes are a proud and stubborn people and they have always been more resentful of the black list than any other neutral country. In addition the Swedish Government are already feeling extremely sore over our recent note on iron ore and other matters,20 and the note delivered last week21 on the subject of ballbearing exports has been very badly received. The [Page 517] listing of SKF would undoubtedly be regarded as an attempt at coercion and we cannot rule out the risk that Sweden would react violently. I need hardly emphasize what a disaster this might be. If the ceilings were removed and if British orders no longer needed to be fulfilled, SKF could, at a conservative estimate, deliver bearings to the Germans to an annual value of 100 million kronor. This would represent a monthly delivery to the value of at least 8 million kronor although there would be nothing to prevent a larger quantity being sent in any particular month. In addition we should lose the limitation on ballbearing machinery, the export of which to Germany might be approximately doubled.
There is a further possibility which needs to be taken into account. Even if the Swedes do not repudiate the War Trade Agreement they might cease taking any very drastic steps to police it. The smaller types of bearings with which we are particularly concerned, are not very bulky and there is always the danger of smuggling. This would obviously be increased if deliveries to the British representatives in Sweden were discontinued. We necessarily depend upon Swedish vigilance to prevent smuggling and this in turn depends upon Swedish good will.
It is further necessary to take account of the bearings which the British supply authorities now hold at Göteborg. At the present time we have about 350 tons and by the end of May the amount will be about 700 tons. Admittedly these stores do not include the small bearings used in aircraft fuselages since these are flown across as soon as they can be obtained. Nevertheless I am sure you will agree that this very considerable quantity represents an important hostage. If Swedish property in the United States or the United Kingdom were sequestered it is not inconceivable that the Swedish Government, by way of reprisal, would lay hands on our property in Göteborg. It must also be remembered in this connection that there are some thousands of tons of bearings of all sizes loaded on the Lionel and Dicto.22 It might be possible to scuttle these ships if they were in danger of being seized. But there is always a certain element of chance in operations of this kind. For all these reasons we do not think that it is worth while running the risk involved in listing SKF. Certainly we ought not to do so until we have fully explored the suggestion put forward by Wallenberg. We shall be grateful if Washington will consider the points I have raised.
I need hardly say that we wholly share your Government’s views regarding the supreme importance of reducing Axis supplies of ball bearings. Indeed, as you will remember, the proposal to make ballbearing plants one of the highest bombing objectives first came from this Ministry, and we have never ceased to urge on all those concerned that this is one of the most vulnerable points in the enemy’s war machine. We therefore entirely agree with the end in view. But the fact remains that as a result of our joint efforts last year, the greater part of Swedish and Swiss production has already been denied to the enemy.”
Winant