611.5231/930
Memorandum by the Secretary of State
The Spanish Ambassador called and stated that the requests for tariff arid trade concessions-by his government and mine had been exchanged and that they were rather wide apart; that Spain had an unfavorable balance of her total international payments; that his country just could not undertake to make additional payments externally without selling the United States more goods; and that Spain was obliged to find many millions of pesetas with which to meet an unfavorable balance each year.
[Page 695]I expressed special interest in his statements and added that my Government was very desirous of improving business relations with Spain and that I would be glad to discuss sympathetically what he had said to me with my associates, Dr. Sayre, Mr. Moffat and Dr. Grady; that I should say, however, that it was neither wise nor feasible for two nations to undertake to balance their accounts with each other; that in the very nature of things some nations found it desirable to buy more from a given country and less from another; that the triangular and multilateral trade methods were thus allowed to come into play, so that international balances could be met from those two sources in addition to the bilateral source. I said further that his government, for instance, bought less from a number of other countries than they bought from it, but that I was not insisting that either his country or mine should equalize trade in such instances, because it would be unsound and restrictive of commerce. I repeated, however, that I would talk the matter over with my associates.