File No. 852.51/61

The Special Financial Delegate in Spain ( Davis) to the Spanish Minister of State ( Dato)1

Excellency: With a view to fostering and facilitating trade relations between the United States and Spain and the mutual exchange of their respective commodities, the Government of the United States of America and the Government of His Catholic Majesty have reached the following agreement:

First. This agreement is supplementary to the agreement made between said Governments under date of March 7, 1918, the stipulations of which remain in force and become a part of this agreement.

Second. The Spanish Government hereby authorizes the granting of credits by Spanish banks or bankers to banks or bankers of the United States of America up to the amount of 250,000,000 pesetas, which may be availed of by bills drawn at 90 days’ sight during the next nine months. These bills may be issued or renewed for the periods which the bankers agree upon, provided the agreement of March 7, 1918, as supplemented by the present agreement, continues in effect or is modified by mutual consent of both Governments, or, if said agreement is not expressly extended or renewed, the interchange of commodities between the two Governments continues substantially as provided for in said agreement. The Spanish Government will permit the free importation of gold which may be required for payment of these credits.

Third. It is the aim of both Governments to foster the direct reciprocal interchange of commodities by means of direct financial relations between the bankers of the respective countries.

Fourth. It is understood that the pesetas furnished to the American bankers under the credits authorized in article second are to be used for purchases made in Spain by the United States or its [Page 1708] nationals, and it is contemplated that said credits will be liquidated by the exportation from the United States to Spain of cotton, tobacco, petroleum, machinery and other articles. Payment for purchases up to the 31st of December, next, may be made in pesetas or dollars at the current rate of exchange at the time of making payment. After the 31st of December, next, the purchases shall be subject to such general regulations as the United States may adopt for neutral countries in which conditions similar to those with Spain may exist.

Fifth. In addition to the interchange of commodities established under the agreement of March 7, 1918, both Governments, in a spirit of friendly accommodation and with the desire of fostering their mutual commercial relations, shall permit the export of such additional quantities of the articles specified in said agreement and of other commodities as may be requested and conveniently spared, having in view their respective needs and international obligations. It is understood that the United States Government will not deduct from the regular amounts of petroleum allotted under said agreement the quantities lost on the steamships Serantes and Ramon de Larrinaga.

Sixth. Both Governments will endeavor to have export licenses granted with regularity and without undue delay, and to prevent abusive advances in prices.

I avail myself [etc.]

Norman H. Davis
  1. Received Sept. 20 as enclosure to the Ambassador’s despatch No. 1301, Aug. 29, 1918. Despatch and identic note of the Minister of State to the Special Financial Delegate, Aug. 28, not printed.