File No. 652.119/1140
The Ambassador in Spain ( Willard) to the Secretary of State
[Received July 16, 2.45 p.m.]
1550. War Trade Board [from Smith]:
In conference with Government delegate, having the list corrected to June 28 showing vessels, steam and sail, tonnage of 50 tons and over, aggregate 726,000 gross register, of which 623,000 are steamers over 500 tons gross register. Delegate asserts all tonnage being operated to best advantage, yet insufficient to care for Spain’s inward necessities, coastwise trade, and native coal distribution by sea occasioned by [congestion of] railroads, plus assistance to England, France, Italy. He submits approximate quantities of commodities carried to support his contention. To request examination of each steamer movement and properly check his statement would, even if feasible, require much time. Maritime records appear to be incomplete, confused, unreliable. I believe tonnage list submitted is correct subject to the deduction of vessels repairing, making actual Spanish tonnage held in abeyance [operation?] not over 575,000 tons gross register.
Positive satisfactory examination of how tonnage is employed can only be obtained by Lloyds. Associated Governments [ought to] satisfy ourselves Spanish tonnage is judiciously employed not only to help serve Allied interests and Spain’s actual needs, but also assure ourselves that, owing to absence of actual Government control of Spanish shipowners, Spain will not eventually become dependent on Allied tonnage to keep her alive. Spanish owners appear able to ignore Government decrees and are content with making huge profits through uncontrolled routing and high rates notwithstanding heavy losses without new tonnage in sight. On good authority 85,000 gross tons reported lost since January 1918. British apparently not anxious to move in negotiations so long as Spanish steamers carrying coal from England continue returning there with needed minerals. Spain is apparently unable to spare or perhaps unwilling to release tonnage and will stand on declaration of insufficiency tonnage and will await next move from us.
Tonnage conditions so closely connected with reported grave industrial factors that I consider interests of Allies best served by [Page 1688] conference at Washington. Spain which is dependent on us should if necessary send accredited representatives to Washington. Believe little headway can be made here. Court officials and most embassies away. Full report to you in person seems imperative as time will be wasted here and can finish my investigations and depart in about a week. Smith.