711.52/380: Telegram
The Ambassador in Spain (Hayes) to the Secretary of State
[Received March 9—12:26 p.m.]
792. I called on Foreign Minister at his request this morning. He said he had submitted an account of our negotiations to the Council of Ministers which had expressed pleasure at good disposition of American and British Governments and especially that we had consented to withdraw our request for a complete and permanent wolfram embargo in favor of a limitation on exports to Germany.
He said he had been authorized to set up a special commission comprising technical experts of the Ministries of Foreign Affairs, Industry and Commerce and of American and British Embassies, in order to fix the exact limitation to be placed on wolfram exports. He said he would remind me in this connection that last August Spain had concluded a commercial agreement with Germany under which Germany was entitled to acquire from Spain as much wolfram as the status of the German-Spanish clearing would permit. It seemed obvious to the Council therefore that if Spain were to meet our desires it would have to violate this agreement with Germany or negotiate a new agreement. It was proposed therefore that negotiations should proceed with the Allies on one side and Germans on the other. The Government is anxious to reach an early conclusion and the Minister believed that a time limit must be set up on negotiations. Meanwhile the temporary embargo now in force will continue.
Minister then reminded me that all other pending matters had been agreed to and that further definitive action on them would be taken as soon as an agreement on wolfram was reached. He hoped therefore that American Government would not continue to embargo petroleum supplies to Spain.
[Page 357]I expressed great disappointment and said it appeared to me that the Council of Ministers had taken a big step backwards. I said that in our last conversation we had seemed to be in agreement that wolfram exports to Germany during 1944 should be limited to 10% of the total amount for which export licenses had been issued in 1943. I understood that he would present this proposal to the Council of Ministers and had so informed my Government which had expressed its willingness to authorize resumption of petroleum shipments if the Council of Ministers approved the proposal and if full assurance was given on other pending matters.
Now I was told that a commission was to be set up to arrange for a limitation of exports, probably at a higher figure than 10 percent and involving additional delay. It must be obvious to him that, in the absence of positive assurances concerning wolfram, petroleum shipments could not be resumed.
Jordana said that when he reported to the Council concerning the negotiations with me he had to report at the same time concerning current relations with Germany and the existing commercial agreement with that country. The Council perceived a discrepancy between our request and the 10 percent proposal on the one hand and the agreement with Germany on the other. The Council felt that a 10 percent restriction would be an embargo under a different name and therefore felt that another arrangement must be made. While the percentage could be low, it must be of such nature as to permit negotiation of a new agreement with the Germans which would not outrage them and which would not constitute a flagrant violation of the existing agreement with the Germans.
He said he wanted to make clear that the Council was quite willing to reach an agreement sufficiently favorable to us to constitute a friendly gesture by Spain toward the United Nations and a generally unfriendly gesture toward Germany, but the Council believed at the same time that new negotiations with Germany would be necessary. Jordana urged that the matter be treated by the proposed commission and expressed the opinion that there would be little discrepancy between the 10% suggested and the figure proposed by the Spaniards. He said that in any event the establishment of the Commission would be helpful to him in softening German reaction.
I again expressed disappointment and reminded Jordana that his new suggestion was quite at variance with the proposal he, himself, had made to me previously to the effect that instead of a complete embargo exports to Germany during 1944 might be reduced to as low as 10% of total 1943 exports calculated on the basis of export licenses issued. I had told him that I would submit his proposal to my Government [Page 358] although I did not believe it would prove acceptable. My Government, much to my surprise, had accepted the proposal and I had so informed him on February 28. He had expressed relief at this attitude of my Government and believed an agreement could be reached.
Jordana reiterated that the Council of Ministers was not far away from the proposal we had discussed, but that it felt that discussion with the Germans would be expedited and facilitated through the operation of the proposed commission.
I said that I would, of course, act on his suggestion and would nominate Ackerman to represent the Embassy on the Commission, and I would inform the British Ambassador of his proposal and expected the British Ambassador would likewise appoint a representative to the Commission. I could hold out no hope however that my Government would be willing to accept a “compromise” and ventured the opinion that the further delay necessarily involved would mean that Spain would have more trouble, rather than less, with Germany.
Jordana said he believed a settlement could be reached in a short time. Negotiations with the Germans were already proceeding rapidly. Meanwhile, the Spanish Government had no thought of going back on assurances already given to United States. The Commission would be headed by the Under Secretary for Foreign Affairs and would be composed of technical experts from the Foreign Office and from the Ministry of Industry and Commerce. He said the Commission would begin to work promptly.
I have informed Hoare of the foregoing and I believe he will appoint Ellis-Rees to represent the British with the Commission.
Meanwhile I left no doubt in Jordana’s mind that petroleum shipments would not be resumed until a really satisfactory agreement was reached, and I gave him no reason to believe that we would accept anything less than the 10% limitation on which he had previously proposed.
Jordana showed less confidence in his own position, this morning. It is evident that he was unsuccessful in selling the 10% proposal to the Council of Ministers and it is possible that the Council considers it more prudent to delay agreement and accept the economic disadvantages of such delay pending the outcome of large scale military developments on the continent, which the Spanish public feel are imminent.
Repeated to Lisbon.