811.20 Defense (M) Spain/962: Telegram

The Ambassador in Spain ( Hayes ) to the Secretary of State

2156. COUSC 1738. Supplementing my 2089, August 10, 8 p.m.; COUSC 1729.65 The Spaniards, as anticipated, will accept gold in payment of the proposed sale of 50,000,000 pesetas. The basis of such a transaction will be 0.29032 grams fine gold to one peseta.

The Spanish dollar balance is now approximately 11,000,000 and wolfram licenses for another 5,000,000 are now pending. We cannot any longer beat around the bush on the use of gold to meet our financial problem if we are to hope for the prompt issuance of export licenses. Although we are continuing to press the Instituto to carry dollar balances in New York to the full extent of our requirements, they still resist. It is our thought that you complete arrangements for supplying free gold so that this may be used as a last resort to avoid interruption of our preemptive activities. Please reply as promptly as possible.

Hayes
  1. Not printed.