File No. 652.119/1306
The Secretary of State to the Ambassador in Spain ( Willard )
1415. For Davis from Leffingwell:
Treasury 5. Your 2, Embassy’s 1623,1 August 2, 5 p.m.; your 3, Embassy’s 1632, [August 3], 6.45 a.m. [1 p.m.]; and your 4, Embassy’s 1635,1 August 4, 7 p.m. War Trade Board voted August 8 to immediately issue licenses for all oil and cotton covered by Spanish agreement and not theretofore licensed. When issued War Trade Board will have licensed all commodities covered by agreement. Confer with Chadbourne and ask him in view of your negotiations and general situation to telegraph immediately to War Trade Board his recommendations for shipment of commodities not covered by agreement and desired by Spain.
Nothing has been done to prevent our putting in force requirement that commodities to be licensed thereafter must be paid for in pesetas either by agreement with Spain or by regulations made here but no intention of requiring such payments in pesetas during your negotiations without previously obtaining your views and recommendations. Payment for exports in pesetas is preferable to [Page 1697] credits and ground with Spanish Government should be prepared so that if it seems wise to take this action there will be no feeling on their part that unfair advantage has been taken of them. It is probable that similar requirements for payment of our exports to other neutrals will soon be put into effect. So far as your recommendations to Treasury involve action by War Trade Board endeavor to have Chadbourne make necessary recommendations to War Trade Board. In case of difference of opinion on such recommendations both you and he should indicate points of difference for settlement in Washington.
War Trade Board has voted that petroleum shipments for Spain lost on Serantes burned in New York Harbor might be replaced by Spain without prejudice to Spain’s regular allotment and that same action be taken regarding oil cargo for Spain of Ramon de Larrinaga, should the press reports of the destruction of said ship by German submarine and actual destruction of such oil be confirmed. This news was given to newspaper correspondents and to foreign newspaper cable service of Committee on Public Information. War Trade Board arranging to have Embassy at Madrid informed of ‘the action as above.