File No. 652.119/560a

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

[Telegram]

899. In view of the prospective resumption on a considerable scale of shipments to Spain, it is felt that some organization must be created to assure a proper distribution of these goods, making certain that concerns working on Allied orders receive their full requirements. Certain serious dangers are felt to exist such as—

(1)
That articles of small bulk and of high value may be transshipped to Germany by submarines;
(2)
That stocks of cotton, petroleum and other important commodities will be accumulated in Spain in German interest;
(3)
That American goods may, by reconsignment or distribution, become available to enemy concerns which will remit to Germany or employ in her interest the profits arising from utilizing such American goods;
(4)
That Spanish ships clearing for Italy and other Allied ports may discharge their cargoes in Spain, thereby avoiding rationing limitations on cotton and petroleum and our own principles of conservation.

[Page 1669]

The War Trade Board suggests the appointment by it of a representative in Spain who, acting under the guidance of the Department and yourself, will create an organization presumably of an informal character to guard against the foregoing dangers. The War Trade Board would issue no license to export to Spain without previously communicating with this representative and securing his recommendation.

It is recognized that any such control must be exercised with great tact to offend as little as possible the sensibilities of the Spanish, but some such supervision is regarded as essential in view of definite and cumulative evidence of the reality of the dangers above referred to. Our pending agreement with Spain by virtue of its clauses providing for exportation from the United States only to meet Spain’s Internal needs and providing against accumulations, impliedly recognizes the rights of the United States to assure itself on these matters prior to granting export permits. Please cable your views on the foregoing, and it is suggested that you discuss the matter informally with your British and French colleagues.

Lansing