Memorandum from Acting Secretary of State Robert Lovett to President Harry S. Truman, with Attachment

DEPARTMENT OF STATE WASHINGTON September 8, 1947 MEMORANDUM FOR THE PRESIDENT Subject: Memorandum on Swiss-American Relations I have read with interest the memorandum entitled "Notes on Swiss-American Relations" which you sent to me on August 23, 1947 and which I am returning herewith. I cannot but feel that the alarm displayed in the memo- randum over Soviet influence in Switzerland is somewhat exaggerated. The Swiss Government is probably the most stable, and certainly one of the most conservative, in Europe, and Communist influence in politics and labor unions is of small significance. It is true, of course, that a further serious deterioration in the western European economy, which could well occur in the event of a failure to implement the proposals advanced by Secretary Marshall in his address at Harvard on June 5, 1947, might have serious economic repercussions within Switzerland leading to an increase in political unrest with possible Communist overtones. It is also true that any measures by this country to place further restrictions on Swiss exports to the United States would have a serious effect upon Switzer- land. This would be particularly the case should any attempt be made to limit United States imports of Swiss watches, since they constitute Switzerland's largest single export item. At the present time, however, Swiss-American relations are on a most friendly basis with no immediate prospect of their deterioration. The only problems of importance now existing between the two countries are the question of the liquidation of German assets in Switzerland, and the unfortunate delay on the part of the Congress in enacting legislation to authorize payment to Switzerland for damages caused by the accidental bombing of certain Swiss cities by the United States Air Forces during the war. In view of