The Ambassador in Spain (Bowers) to the Secretary of State
[Received 4:15 p.m.]
1. Your telegram No. 78, December 31, 3 p.m.; page 13, my despatch No. 990, December 23; and my despatches Nos. 995, December 26; 998, December 30.13[Page 786]
According to general interpretation of exchange agreement all future applications for French exchange covering commercial or other credits will be authorized promptly.
In view of inability of Spain to meet French demand for liquidation of presently deferred credits, which demand the French made a condition precedent to signing the commercial treaty, Spain has secretly agreed to find within 60 days from December 22 a means for the liquidation of such deferred credits.
Spain was driven to this agreement in order to avoid further delay in promulgated commercial treaty which delay would have caused loss of leading market for Spanish orange crop, Spain’s principal export, and ruined many orange producers.
British financial commission now here negotiating on the basis of Spanish proposal for a clearing agreement as I pointed out in my telegram of December 28.13a The fact that we do not know the nature of the exchange clauses in pending agreement makes it difficult for Embassy to judge probable effect on our interests of French and British agreements. In fact this Embassy’s failure to receive a complete text of the treaty, with American interests here apparently better informed, makes our position intolerable.