811.20 Defense (M)/5890: Telegram
The Acting Secretary of State to the Chargé in Spain (Beaulac)
207. Your 338, March 31 and 347 of April 2.41 Each day’s discussion of questions of trade interchange as between this country and Spain and Portugal seems to be recording progress (a) towards defining the nature and range of the possible interchange, while (b) [Page 286] bringing to the forefront novel problems that require solution The Department believes that your present method of dealing with the situation is entirely satisfactory, to wit, (a) the working out with the Spanish Government of arrangements permitting the conclusion of certain specific buying operations of this Government and the British Government, (b) simultaneous review of the whole field of possible trade interchange with a view towards seeing whether it can be brought together in a more or less unified, balanced and stabilized program.
It is realized that such a program would always have to have a large measure of flexibility so that all parties could take continuous note of changing circumstances; and that therefore rigid and precise formulations of obligations will have to be avoided. However it might well prove both possible and useful, when the preparatory discussions are completed, to endeavor to express our mutual undertakings in what would be a further exchange of memoranda.
It is recognized that it will probably not be possible to reach this point during Labouisse’s visit to Spain, but the examination now going on of the lines of possible agreement commodity by commodity is most useful preparation. In regard to the matter of what commodities are to be supplied by us we agree with the suggestion contained in your 347 that decision in this matter be delayed until Labouisse returns to Washington. Full consultation with the Combined Raw Materials Board will be necessary and the whole list will obviously have to be thoroughly examined in the light of our own supply situation
It is obvious that the list cited in your numbered paragraph 4 of 347, even if construed to mean supply from either the United States or Great Britain, includes items we shall not possibly be able to undertake. The list cited in numbered paragraph 5 looks far more feasible.
We are continuing to consider possible means of bringing about some measure of equalization of the price terms on which American products are made available and those which we presumably would be compelled to pay as indicated in paragraph 11, your 338. It is believed however that at the moment all that it would be advisable to do is to let the Spanish and Portuguese authorities know that consideration is being directed to this problem.
- Neither printed.↩