811.20 Defense (M) Spain/1203: Telegram
The Secretary of State to the Ambassador in Spain ( Hayes )
2662. The Department awaits with interest your comments on outcome of your discussions with the British, as indicated in your 3637 of December 10. In the meantime we regret to note that the Spanish apparently still remain unimpressed with the advantages they now derive from the present flow of supplies from U.S. and U.K. sources.
The suggestion put forward by them that as a gesture they make pesetas available against dollars in the U.S. should be accepted as a matter of course and should not be treated as a concession. The Spaniards will not only be acquiring dollars to be used for their own benefit for postwar purchases, but they will be building up this beneficial purchasing power at a rate far in excess of value given by them, due to the grossly inflated wolfram prices. Furthermore, as you will recall, this very same facility was made one of the primary conditions of the July–December 1943 Spanish program. It was stipulated in paragraph numbered 1 of the proposed statement to be made to the Spanish authorities that our supplies would be made available to Spain in the expectation that the Spanish authorities would take all necessary action to facilitate the purchases desired by us, including the granting of peseta exchange against dollars in New York if necessary. Please see Department’s instruction no. 497 of July 19, including the note to subparagraph (b) of paragraph 1 of the proposed statement enclosed.99
We shall withhold further comment pending advice as to the outcome of your discussions with the British.
- Instruction No. 497 not printed; enclosure not attached to file copy.↩