Foreign Relations of the United States: Diplomatic Papers, 1943, Europe, Volume II

852.6363/806: Telegram

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

Madrid, May 1, 1943—1 p.m.
[Received May 2—11:46 p.m.]

1117. Your 958, April 27, 3 p.m.

1. Fundamental question involved in a consideration of petroleum program is whether we can obtain greater advantages from a liberal than from a niggardly policy.

2. When 1943 program was under study primary consideration was given to reaching a figure which would permit Spanish economy to function at a level sufficient but only sufficient to ensure production and distribution of most essential commodities. Secondary consideration was given to means by which this petroleum could be made available. Quantities required for each component of Spanish economy were carefully reviewed. Sum of these was then compared with means of transportation, i.e., tankers, and net result was program submitted by Smith in despatch No. 452 [450], November 20 last²³ and approved by all American and British agencies concerned. There have been no subsequent developments showing these calculations to be in error.

3. Since petroleum program got under way there has been improvement of transportation services in Spain and internal food situation has been ameliorated. However, petroleum supplies furnished have not permitted adequate transportation of foodstuffs and other commodities. While starvation rationing of petroleum products necessitated during large part of 1942 [apparent omission] your withholding of petroleum supplies for 4 months no longer exists. Our studies convince us that supplies at rate of 541,000 tons per year as agreed in program will be barely sufficient to meet minimum needs.

4. The fact that there has been no recent serious interruption to flow of petroleum products to Spain has permitted some liberalization of extremely severe rationing restrictions necessitated during 1942 and has given results more favorable to us than we had anticipated even late last year. In political field it has helped to strengthen elements in the Government favorable to us and converted many others to our side. As a result we have been able to achieve many objectives which otherwise would have been extremely difficult, such as acceptance of our guarantees at time of North African landing²⁴ (if they had not been accepted the soft under belly of the Axis would not have been exposed for a long time); Spanish determination to resist any Axis aggression; release of all our military internees, and of French refugees, mostly military; return to us uncompromised of important secret military equipment; consent to establishment of French North African representation; and, on the economic side, smooth functioning of our broad program which has been damaging to Axis. It has created public good will which extends from lowest class to highest, excepting only minority in Falange which still clings to hatred of democracies and which would like to see our program fail. Our military personnel have informed War Department that they now consider Spain a potential ally rather than a potential enemy.

5. We must now determine whether we wish to interfere with a program which has brought us such benefits merely because fulfillment of the program (which I repeat has already been agreed to by all agencies concerned) would involve importation of greater quantities of petroleum products during present quarter than during two preceding quarters when delays due to necessary repairs to tankers reduced carrying capacity of fleet. We should bear in mind, in this connection, that increased imports during present quarter will go to meet increased agricultural demand. Although Spanish Government has not been promised any specific quantity of petroleum products, it has experienced no interruption of movement of its tankers since present program agreed to excepting that necessary for Naval control; therefore there is widespread belief United States is not attempting forcibly to limit movement of petroleum products to Spain to levels below its most essential requirements. In searching for a possible explanation of the plan to reduce petroleum supplies to Spain the following questions occur to me: Are we to create dissatisfaction solely to diminish supplies by 64,000 tons a semester? What can be accomplished by this? What advantages would it bring to us? How will it help our war effort?

6. Program approved during Smith’s visit in Washington in December equivalent to 541,000 tons per year. This figure represents not more than 60% of Spain’s normal requirements and is in every respect within the interpretation of the policy laid down by the Department by which petroleum supply program is governed. These products are consumed in Spain and are not benefiting our enemies directly or indirectly. Month-end stocks have been and will be kept within agreed limit. Product being carried in Spanish tankers and authorities are sufficiently informed on world petroleum position to know that ample supplies are available in Caribbean.

7. Furthermore, in agreement with Department and Bureau of Economic Warfare we are exploring possibility of exploiting Spanish economy further to advantage of our war effort. Any arbitrary reduction of petroleum supplies to Spain below approved program, in face of developments in Spanish situation which all Spaniards as well as we and the Axis know are favorable to us, might seriously prejudice the carrying out of those plans.

In view of all the above, I see no logical reason for cutting this program down to 400,000 tons or for modifying any of the program figures which, after careful review last December, were approved by State, Bureau of Economic Warfare, and London, and I request this program be maintained.

Hayes

23. Not printed.
24. For correspondence regarding the invasion and occupation of French North Africa, see Foreign Relations, 1942, vol. ii, pp. 429 ff. Concerning guarantees to Spain, see President Roosevelt’s letter of November 8, 1942, to General Franco, ibid., vol. iii, p. 306.