611.5231/797
The Ambassador in Spain (Bowers) to the Secretary of State
[Received March 31.]
Sir: I have the honor to report that commercial and financial relations between Spain and the United States appear to be approaching [Page 692] Something of a crisis. The recent Decree regarding “dumping”—Despatch No. 313 of the 20th instant4—while principally directed against Japan may affect American trade in an adverse fashion. The desire of Spain to keep the peseta tied to the French franc and the feebleness of the peseta may cause Spain to embargo the export of capital to the United States—Despatch No. 314 of the 20th instant4—. The commercial treaty just negotiated between Spain and France5 and described fully in the Commercial Attaché’s special report No. 6 of the 14th instant4 is bound to affect American commerce with Spain. On page 21 of his report, Mr. Greenup quotes an official of the Ministry of Commerce to the effect that commercial treaty negotiations will soon take place with Germany, Belgium, Switzerland and Holland, as well as a little later with England and Turkey. He adds that a Spanish contingent law may be expected in the near future. It is obvious, therefore, that if we are among the last of the nations to negotiate a commercial treaty with Spain on a contingent basis, there will be very little left to Spain for bargaining purposes. Señor Fernandez Shaw, the Acting Chief of the Treaty Section of the Ministry of Commerce, has stated pithily in this connection, “Last come, last served.”
Spain is thus trying to benefit its commercial and financial position by bargaining with other countries and in exchanging concessions with them. The Chilean Nitrate Company, for example, is able to export pesos as against Spanish blocked credits in Chile. If we are unable to offer quid pro quos or to lend money to Spain should we be asked, or to exchange tariff concessions, our relations with Spain are sure to suffer. This is particularly so in view of the fact that Spanish authorities keep steadily in mind the adverse trade balance with the United States which they estimate at 300,000,000 pesetas. The present Government is, however, friendly toward the United States and would be eager to negotiate a commercial treaty with us on the basis of reciprocal concessions. I believe, therefore, that if such action is possible it should be taken at once. In this connection it should be borne in mind that what may have appeared to be discriminations against the United States are not so in fact, since every privilege accorded another country by Spain has been in return for a concession given by that country to Spain. We are now in a somewhat unhappy position only because we have not been in a position to trade concessions.
Respectfully yours,