The Secretary of State to the Ambassador in Spain ( Bowers )
4. Your No. 4, January 20, 4 p.m. The Department shares your belief that in many respects it would be advantageous to conclude a trade agreement with Spain without undue delay. On the other hand, we feel that it would be unwise to hasten to sign an agreement until we are better informed than at present as to the ability and intention of Spain, in the light of the Franco-Spanish and Anglo-Spanish payment agreements, to pay for our exports without a delay so great as to nullify the quota and tariff concessions offered us.[Page 790]
We have therefore called in the Spanish Chargé d’Affaires and informed him that we feel that before any agreement can be signed there must be a much more definite understanding than now exists between the two governments as to what is to constitute “fair and equitable treatment[”] in the allocation of foreign exchange and that we could not define what treatment might reasonably be regarded as fair and equitable in the present circumstances until we are in possession of more complete data than is yet available to us. We asked therefore that he request his government immediately by telegraph to facilitate our consideration of the problem as much as possible by furnishing us with whatever information may be available to it with regard to Spain’s balance of payments with the world for the years 1934 and 1935 and supplying us further with a list of those products for which up to the time of the conclusion of the agreements with France and Great Britain payment had been authorized on the basis of 90-day bills, together with a statement of any changes in the list since that time and any changes which may be contemplated.
When this information has been received and analysed in connection with other data now being collected and studied we shall formulate a definition of what we regard as fair and equitable treatment with regard to payment for our exports and will inform the Spanish government thereof.
Your despatch No. 1005 of January 716 transmitting an advance copy of the Anglo-Spanish agreement has been received. Has official text yet been published and if so does it differ in any important respect from advance copy? Please cable reply to this question.17