File No. 658.119/378c
The Secretary of State to the Ambassador in Great Britain ( Page)
7784. For Sheldon [from War Trade Board]:
No. 505. Swedish agreement.
At the conference held in London on the 6th of November between the representatives of the War Trade Board and the French and British blockade committees it was agreed as an act of policy with respect to cereals for human and animal consumption that Sweden under normal conditions was a self-supporting country in war time; that in consideration of crop failure she should be permitted to import cereals to supplement home supplies up to an agreed ration, the milling of the grain to be controlled and the sustenance of the live stock determined by the need for meat and dairy products. There has been no change in this status. According to this agreement Sweden should receive from now until the new crop only enough cereals to carry her through upon the agreed basis; and the entire problem of her importations after the 1st of September should depend upon her new crop. The decision upon her new crop should rest also upon conditions in the Ukraine and in Denmark. Sweden is now a competitor of Germany in Denmark and will be a competitor of Germany in Russia. Following our agreement in London in November, the action of the Wheat Executive in making an offer of grain to Sweden in the event of an agreement, or even in discussing the question, was entirely outside of the province of the Wheat Executive. Sweden does not need 100,000 tons of cereals for man and beast from now until her new crop. On the basis of [Page 1230] the allocations to Holland she ought not to receive over 50,000 tons. These must come entirely from North and South America and not at all from Australia.
Linseed cannot be secured from North America and ought not to be secured from South America in excess of the ration provided—3,000 tons in terms of oil. Rice cannot be secured until after October 1918. Proposed increases in ration of tin, lead, zinc and copper imports and proposed increased exports to Germany of carbide, ferrosilicon and pulp should only be permitted in consideration of our receiving the full 500,000 tons of Swedish shipping. Molybdenum should not be permitted to be exported to Germany at all. The proposed increases would serve largely to nullify the restriction accomplished by the agreement with Norway and we particularly oppose the proposed increased exportation to Germany.
Referring to your No. 543, Embassy 9961, May 9, 6 p.m.,1 requesting information as to whether certain denominated goods, totalling 176,000 tons, could be licensed contemporaneously with the conclusion of the agreement. We would be prepared to issue export licenses thus permitting purchase and ultimate shipment, but we do not feel that the goods should be permitted to be exported at once, but rather in the usual quarterly quotas. If, however, we obtained under agreement the full 500,000 tons of shipping we would consent to exportation at once of the specified commodities provided dates of delivery of tonnage to us were definitely arranged so that privilege of immediate shipment of commodities would offer no temptation to engage Swedish tonnage so as to postpone unduly delivery of tonnage to us.
The iron ore arrangement suggested by Sweden amounts practically to no limitation upon Germany, particularly with respect to low phosphorous ores.
What provision has been made in Swedish agreement for financial clauses? Clause should be incorporated permitting approved American parties or governmental agencies of United States having payments to make in Sweden to deposit dollars with Federal Reserve Bank or with any banks in United States selected by Government of Sweden against which Government of Sweden will arrange to have corresponding payments made in Sweden in kroners at the par of exchange. Unless Great Britain and France have made specific terms clause might also contain general assurance on the part of Sweden in form familiar to you, expressing a willingness on Sweden’s part to grant credits to them for the purpose of facilitating payments those Governments may have to make in Sweden.
- Not printed.↩