811.20 Defense (M) Spain/1165: Telegram

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

2571. Following comments are to correlate and give our interpretation of a number of recent telegrams between Department and Embassy:

1.
In its 2194 of October 15, Department suggested seeking wolfram embargo in exchange for making wheat available to Spain.
2.
In your 3066 of October 21 you questioned this approach and proposed instead a Spanish embargo on wolfram, plus either an agreement by Spain to prohibit export of zinc, strontium and fluorspar or, alternatively, an agreement to transport to the U.S. in Spanish ships such tonnages of these materials as we might acquire, in exchange for following concessions:
(a)
Suppression of surcharges on petroleum and other products;
(b)
Increased purchases by U.S. and U.K. of commodities entering into traditional trade as well as commodities for liberated areas sufficient to “represent the cost at present prices less taxes of the volume of wolfram purchased during the present year”;
(c)
Use of gold to compensate Spanish for deficiency, if any, in trade balances.
3.
Your 3112 of October 26 suggested an alternative of far-reaching effect. Its consideration must be temporarily postponed.
4.
COUSC cable no. 1874 of October 28 (Embassy’s 3149)93 named a large number of items that it would be possible to obtain from Spain under program suggested in your 3066.
5.
Your 3153 of October 28 and 3243 of November 494 stressed importance you attached to offering wheat.
6.
About this time Department determined to take advantage of political developments by demanding, among other things, an embargo on wolfram exports irrespective of a quid pro quo, wheat or otherwise. This was the occasion of Department’s 2384 of November 6.
7.
We understand from your 3294 of November 10 that such a demand was made. However, your 3302 of November 11 questioned the advisability of continuing such a line and, in effect, repeated the suggestion that we try the plan outlined in your 3066. It also suggested a possible second approach which, in effect, we understood to involve the studied interruption of usual petroleum and other supplies in an effort to demonstrate to Spain her dependence upon us and the necessity of her meeting us in certain of economic warfare demands.
8.
The Department’s 2439 of November 15 approved in principle the proposals submitted in your 3302 (including the plan outlined in your 3066). It was intended in our 2439 to indicate a preference to follow the second course outlined in your 3302 (namely, emphasizing benefits Spain is presently receiving), rather than the first course (namely, the plan outlined in your 3066). It had been our hope that it would be unnecessary to offer any quid pro quo to the Spaniards in exchange for a wolfram embargo at least until matter had been carefully considered and cleared with British.
9.
We judge from the terms of the memorandum which you left with the Foreign Minister (your 3398 of November 18), that it was necessary to relate the wolfram embargo to certain proposed concessions to be granted by us. Your 3532 of December 1 indicates that Ackerman is to discuss details with Spaniards. It is therefore necessary to give you our views concerning course such discussions should take. These will be sent in following telegram.

Repeated to London.

Hull
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