US WWII Sate Department
At the start of World WarII the US State Department had only limited intelligence reagarding the capabilities and intentions of not only the enmey, but also of the neutrals.The prevailing attitude of the day was set by the head of the department ,Henry Stimpson who reasoned that 'gentlemen do not read other gentlemens mail. Cordell Hull of the Intelligence Section of the department had non the less managed to put in place a system whereby material destined for belligerant nations was given a freezing order: freezing assets of countries trading in the forbidden merchandise. Sweden, Switzerland, Spain and Portugal were the main culprits. The economic war was waged in three phases. The first phase was during the advances by Rommel in to North Africa and the German push in to the Balkans. The second was with the landings in Sicily and the halt of the German advance in to Russia. There was an interim period where the advances slowed to be followed by the third phase consisting of the time between the Normandy landings and the march on Berlin. During the first phase only Spain showed itself prepared to act in accordance with the US negotiators. With the lack of military progress negotiation became more difficult. The turning point with Sweden began with the Sweinfurt operations and US public outrage. Portugal became more amenable with the landings in Sicily, while Switzerland held out until after the D day landings. Neccessary supplies would be sent if war supplies destined for Germany were interrupted. Those refusing to comply were threatened with not only trade sanctions ,but also with trade penalties and even legal action after the end of hostilities.
An odd state of affairs existed during World War Two , the neutral countries, faring better than former US and British allies now under the German heel.During World War One Belgium was given supplies by the Entente powers after her defeat.No such humanitarian aid was allowed in by Germany,the occupied powers suffering great privation ,their former allies forbidden to give them the basics of life.In order to offset this the US state department put taps on telephone, telegraph ,and radio communications.In addition they assumed control of ships bunker fuel and war related stores ,in effect fighting an economic war alongside the hot war.
The Anglo Swedish agreement of 1939 stressed cooperation between the UK and Sweden in trade. The UK and the US over looked Sweden�s selling of industrial diamonds to Germany (who used the material to build proximity fuses) as Sweden was an escape route for allied airmen shot down over Germany,the reasoning being that the time needed to train a pilot was very critical, a thing which money could not augment. (By international law Sweden was required to detain allied airmen for the duration of the war but in fact, when it was prudent, let them slip on to an aircraft coming from a neutral country.)
Things came to a head in 1943 with the USAAF bombing of the Sweinfurt ball bearings factory.After the raids resulting in great loss of life to the USAAF aircrews the Swedish firm SKD replaced the lost production , even building a new factory so as to fill orders.There was public outrage in the US including riots and property damage to Swedish interests causing Sweden to agree to refuse all credits to Germany and to reduce arms exports, and to stop arms shipments across her territory. Erik Boreman the Swedish under secretary to the Swedish foreign office complained that the US State Department did not understand Sweden�s position. It was not until April of the next year that the German transit route to Finland was closed and insurance cancelled on German ships.
Switzerland proved to be more intractable than Sweden. When the allies asked that she reduce the amount of trade she had with Germany she signed on but on examination of her books the next year it was found that she was trading 50-100% more than when the agreement was signed .When berated the Swiss foreign minister Charles Bruggmann complained that Switzeland did not want to occupied by the Germans which she would be if she refused to trade .This was after the Normandy landing causing a US European Affairs official to ask how many divisions the Swiss had. Bruggmann replied: 50 armed and equipped division; the official countered that at this stage of the war he could not see where Germany would find fifty plus divisions in order to intervene in Switzerland.On October 1st the Swiss put a ban on all arms and military goods to Germany .In April 1945 Switzerland suspended all trade with Germany.In the words of the State Department official Dean Acheson �surrendering one month ahead of General Jodl�.
On the Iberian peninsular Hitler made an agreement with Franco at the Handaye meeting regarding their joint invasion of Gibralter.Eventually Franco managed to wriggle out as he was more afraid of his ally than he was of the allies.Roseveldt had a hard time getting Britain to agree on a joint embargo on Spain, Churchill of the opinion that they could, through diplomacy, wrest Franco away from Hitler. The US and GB could never agree on the correct policy for Spain but with German attention eventually concentrated on the Eastern Mediterranean it became a moot point.
Portugal at the time was the main supplier of wolfram to the world. This iron ore was used in the manufacture of plate armor. Doctor Salazar, the Portuguese Prime Minister, wanted to give all of the belligerent�s equal shares in the running of the mines. The US applied pressure by with holding oil. When the Portuguese complained most loudly the US State department would release a tanker two from US ports hoping that the small amount would ensure that none was going to Germany.At the time the State Department employed a Walton Butterworth .He would send a telegram from Lisbon to Washington confirming a trade agreement and then board the next clipper arriving the same time as the telegram which he would then �hand deliver� to the relevant person at State, awaiting his signature to a reply he had already composed so as to ensure favorable trade terms for the US. Once the clipper on which he flew crashed in Portugal on Lake Tagus ,and ,after rescuing all of the passengers ,Butterworth swam about still hanging on to his official attach case to be picked up half an hour latter. When asked why he did not let it go he replied that it -kept him afloat.