852.6363/957: Telegram

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

1877. Your 1411, June 26. Inquired of the Foreign Minister this morning concerning progress in the plan to eliminate German participation in ownership of Iberia Airline. He said the agreement had been concluded but that there remained certain details to be settled. The Government planned to convert Iberian to a state-owned airline with some Spanish private capital participating, and it planned to float a loan for the purpose.

After receiving this information I told him that in agreement with the British Ambassador I was prepared to outline to him orally the principal conditions under which the British and American Governments were prepared to make available aviation gasoline to Spain. I explained that our countries were at war, that aviation gasoline was a scarce commodity and was the most precious of all war materials. We were reluctant to supply it to any country outside the United Nations and we were obliged if we supplied it to Spain to insist on certain conditions.

I said these came under four general headings:

(1)
Imports should not exceed rate of 320 metric tons per month and stocks should not exceed 640 metric tons at any one time; octane rating would not exceed 87.
(2)
Effective, complete control of distribution and use should be had by our Petroleum Attaché, who would be given all necessary facilities by Spanish Government.
(3)
Gasoline to be used only by Iberia for civilian purposes unless other uses specifically approved by American and British Governments. Iberia could not fly over enemy territory without our consent. I said we were proceeding on basis that Iberia would want to resume its service between Madrid and Lisbon, Madrid and Barcelona, and Madrid and Seville. He said it possibly would want also to resume the line from Madrid to Valencia, I said I did not believe there would be any objection to that. I said I assumed the line would want to [Page 702] continue also to fly from Seville to Tangier and Spanish Morocco, but that we had been examining the traffic on that line and found it consisted to an excessive degree of Germans and Italians. I said we did not intend to supply aviation gasoline in order to facilitate espionage and sabotage work by our enemies in Tangier and Spanish Morocco and submitted the matter to him to suggest what step should be taken to overcome this difficulty. He said our interests and Spain’s in this regard were identical. He wanted to put a stop to or avoid the carrying on of any activities in Spanish Morocco which might be regarded as unfriendly to our operations in North Africa. He said one thing troubled him and that was that a number of Axis prisoners had escaped into Spanish Morocco. The British had recently protested against their being repatriated and had suggested instead that they be exchanged for an equal number of Allied prisoners in Germany. He said this was very embarrassing to him because as I knew Spain had been releasing all Allied escaped prisoners. I said I would discuss this with the British Ambassador. He said he would like to permit the repatriation of these escaped prisoners since their continued presence in North Africa was dangerous both from the Spanish and from the Allied point of view.
There were, of course, a number of Axis Consuls regularly accredited in North Africa. He thought it would be unfriendly if Spain denied them passage on Spanish airlines. He suggested, however, that the Spanish Government adopt a rule that no alien could travel on this line without express permission of Spanish Government, that is, Spanish Foreign Office. The Foreign Office in turn would give such permission to regularly accredited Axis representatives but would deny it to all other Axis citizens.
(4)
The supply of aviation gasoline will be reconsidered if enemy nationals participate in ownership or direction of Iberia. He said he quite understood and it was Spain’s intention to retain ownership.

I then pointed out there were two other points which were not antecedent to supplying aviation gasoline but for which my Government requested sympathetic consideration:

(1)
Spain would try to arrange for establishment of direct air service between Spain and Switzerland. He said Spain had already tried and failed but that it would try again. He hoped Iberia might be able to establish a service.
(2)
We wished landing rights for American commercial airlines in Spain. He said he had discussed this matter informally with the Air Minister who had received the suggestion sympathetically and had requested definite proposals. I said my Government had not made up its own mind as yet as to exactly what it wanted but that it would take up the matter later on. He said that whatever proposals we made would be sympathetically considered.

I shall later communicate the various conditions set forth by the Department to the Foreign Minister in writing. I believe his suggestion concerning control of passenger traffic to Spanish Morocco is very satisfactory from our point of view and has the merit of having been suggested by the Foreign Minister himself. I believe we can [Page 703] count on the Spaniards to do everything they can to arrange for direct air service to Switzerland and that we can also depend on their sympathetically receiving any reasonable concrete proposals we may make for facilities for American airlines in Spain.

After I have presented the complete list of conditions in writing and obtained the Foreign Office’s consent to these conditions I assume the Department will proceed to make aviation gasoline available.

Hayes