811.20 Defense (M) Portugal/1528: Telegram
The Minister in Portugal (Norweb) to the Secretary of State
[Received 9:22 p.m.]
1693. Salazar opened his conversation with Campbell with a long exposé on the juridical features of the Anglo-Portuguese Alliance and questioned the extent to which the Alliance was applicable in matters such as wolfram. However, since the British had based their appeal on the Alliance the problem had been considered on that basis. As background to the proposal given in my 1688, June 2, 4 p.m., Salazar said that the Portuguese decision had been made only after two long Cabinet sessions and that it reflected the best possible Portuguese offer today. To his mind the conditions which had been carefully thought out were fair and the only possible approach to a solution was the complete cessation of wolfram mining even though this [Page 123] entailed a heavy sacrifice both directly and indirectly to the Portuguese national economy. While he estimated it would result in the unemployment of 90,000 people other work would be provided. There was no request for us to purchase stocks on hand.
Salazar countered Campbell’s insistence upon an immediate embargo by contending that it could only be imposed following the signature of a satisfactory supply purchase agreement. He went through the motions of a long legalistic argument intended to present wolfram as a problem separate from that of a satisfactory supply purchase agreement. The latter he considered as being due him anyway as a result of unfulfilled promises particularly the British economic commitments made at the time of the Azores agreement. Salazar was of the opinion that this condition need not entail any undue delay since by intensive efforts a satisfactory agreement could be negotiated within a few days.
He mentioned that in addition to the goods made available under the previous agreement he would require certain supplementary supplies notably steel in view of the possible curtailment of German shipments. He would also require assistance in transportation.
With regard to the 100 tons of wolfram he pointed out that following the Anglo-American protests the Minister of Interior had curtailed shipments to Germany and that only 50 tons of the 150 tons of past year’s overlap had been shipped. He did not mention the amount shipped since March 1 (which according to our figures is 450 tons but which Salazar previously informed me were 70 tons monthly). Campbell who wished to avoid argument on this score did not get involved in a discussion on figures. He did say however that his Government would be disappointed with a conditional rather than a complete embargo and that he feared this feature would ruin the opportunity for an immediate agreement.
Campbell showed Salazar draft of a British announcement which had been prepared for release Saturday98 or Monday stating that Portugal had imposed a total embargo on wolfram. This, Campbell said, could not now be published since there was no immediate prohibition. (This was first I had heard of such an announcement and in reply to my inquiry Campbell said that he presumed it had been worked out after consultation with Washington.)
Campbell stated that he had made no recommendations to London but had merely reported his conversation with Salazar. He understands that details of ELW report will be sent to British Embassy Washington.
From the psychological point of view Salazar’s proposal has a certain appeal since it is, with exception of 100 tons, a total prohibition [Page 124] and not an embargo. Campbell feels that from Parliament’s point of view it is better than the Spanish agreement since it would eliminate argument that Germany is getting better treatment from Portugal than from Spain. We both feel that Salazar can be persuaded to change his attitude on export prohibitions prior to signing of a supply purchase agreement and working out other economic arrangements. It is my impression that Salazar wants a definite agreement but would accept a commitment in writing along general lines with details to be worked out later (British Embassy here feels such an agreement should be for period January 1 to December 31. In Salazar’s interest it would be an admission on our part that we are and have been committed to an agreement but at same time would actually limit our commitments to a 6 months period).
Salazar had requested German Minister to call today and intended to inform him of the agreement. However, he now plans to postpone this until he makes his protest on the Serpa Pinto incident99 which he construes as a warning to Portugal. When asked why Germans should choose this time to make such a warning Salazar admitted that about 2 weeks ago he had told Eisenlohr, the German negotiator, that he was about to make an agreement regarding wolfram and that Eisenlohr had left for Germany the next day. Salazar does not feel that metropolitan Portugal is in danger from Germany but the British are egging him on to make a strong protest feeling that this will put him in a better position to take a firmer line on wolfram.
Sent Washington, repeated to London, Madrid by courier.