611.5231/990
Memorandum by the Assistant Secretary of State (Sayre)
The Spanish Ambassador called to see me this morning in order to discuss the trade agreement. He said that Spanish negotiators were now in Paris about to negotiate a trade agreement between France and Spain. He fears the possibility, if not probability, that some arrangement or agreement will be reached between the Spanish and [Page 713] French negotiators which would tie the hands of the Spanish Government and make it impossible for them to give to us some of the concessions which we are requesting in our own trade agreement negotiations. He therefore feels it imperative to get to Madrid a statement of the American proposals and a suggested outline of the Spanish-American trade agreement at the earliest moment and before commitments are made to the French negotiators. For this reason the Ambassador proposed that our experts meet together beginning Monday and that each side lay on the table the maximum concessions which its Government is willing to make. He spoke of the wide disagreement concerning the Spanish quota for American motor cars and said that this question would have to be left in abeyance for the time being.
I replied that we would be glad to facilitate speeding up the reaching of some kind of an agreement. I said, however, that the question of the quota on import cars was vital to us. I added that I felt sure the President would not support the proposed maximum concessions oil commodities such as olives, olive oil, cork, almonds, onions, et cetera, unless he felt assured of the political support of the automobile interests; and that we could not win the support of the automobile interests unless we were assured of a quota of at least 41% of the importations in kilos (which, for the year 1934 when Spain imported 14,383,000 kilograms, would amount to about 5,897,000 kilograms). I said that confidentially the American motor people were insisting that we should obtain 40% of the imported cars by number rather than by weight and that 41% of the importations by weight amounted to substantially less than 40% of the importations by number. I said that I was not sure that we could win the support of the automobile people by a 41% by weight quota, but that I would be glad to see what could be done. I said, however, that unless we had at least a 41% by weight quota I felt sure that the President would not approve of the maximum concessions proposed on the commodities in which Spain was most interested.
In reply to the Ambassador’s proposal, therefore, I said that we would be glad to agree that both sides should put all their cards on the table in the form of maximum concessions which each side would be willing to give but that so far as the American proposals are concerned he and his Government must very distinctly understand that these maximum concessions would be strictly conditioned upon the United States being guaranteed at least a 41% by weight quota of importations of automobiles. Without this, I said that I feared it would be impossible.
I then called Mr. Hickerson into my office and while he was there repeated the arrangement proposed. To this the Spanish Ambassador [Page 714] agreed and promised that in communicating with his Government he would make clear that the American proposed maximum concessions would be contingent and dependent upon the United States receiving a 41% by weight quota for automobiles.
I promised the Ambassador that we would be prepared to begin these new intensive discussions on Monday morning at 10:00 o’clock and that we hoped conclusions could be reached so that he could send a cable to Madrid next Wednesday.