811.20 (D) Regulations/6114: Telegram
The Acting Secretary of State to the Chargé in Spain (Beaulac)
149. Department’s 122 of March 4 and your query as regards fourth paragraph of this message contained in your 251 of March 12.34
During the past week the Department has been disturbed by various reports and indirect indications of Spanish policy that have proven difficult to appraise (and concerning which it is now urgently seeking clarification) It is furthermore endeavoring to check upon certain reported activities of Spanish tankers in American waters which have been brought to its attention through Naval Intelligence. Pending this clarification, which has seemed necessary to have assurance [Page 284] that the purposes of our trade interchange, as outlined in our 122 of March 4, would not be endangered by a change in Spanish policy, further steps for carrying out the program have been held in suspense since the 15th. It is hoped that as a result of inquiries we have been pursuing the way will be cleared again very shortly.
When it is, and the program is made fully operative, the Department contemplates that we will have in Spain the following representation: first, a group of observers in the petroleum field under the direction of Smith.35 Second, representatives of the new buying and selling agency that is being created for operations similar to those carried on by the United Kingdom Commercial Corporation. Thought is now being given to the selection of an individual to head that work in Spain. In all probability it will not be Joseph, who for the time being is being kept in Lisbon for similar work there but who may be later asked to go to Madrid. Meanwhile for the purpose of getting this work well started as soon as the road may be cleared, Labouisse36 of the Defense Materials Division of the Department is scheduled to leave for Madrid by Clipper today. He is fully acquainted with the program and will be able to explain it fully to you.
The Department’s further thought is that there should be someone at the Embassy whose primary assignment would be to keep in closest touch with both of the foregoing operating American organizations, to act as liaison between them and the Embassy, and to work along with them in all necessary negotiations with the Spanish Government. This assignment has been given to Harrington.37 He will of course work closely with the Commercial Counselor but this field of operation is so extensive and delicate that it was judged to require a special assignment rather than merely being encompassed within the general sphere of work of the Commercial Attaché.
Your 271, March 17,38 apparently delayed in transmission, just received. It will be given examination.