Memorandum by the Secretary of State

The Spanish Ambassador made his first call since his return from a four months’ visit to Spain. He said that he had travelled quite a little through Europe and found among the masses nobody with any disposition to fight or to be at all favorably disposed towards war; that politicians and so-called statesmen and officials were about the only persons talking about war, outside of Italy and Ethiopia and Germany. In brief, the Ambassador was of the opinion that there would be no further wars in Europe at all soon.

I proceeded, in advance of his reference to the trade agreement negotiations between our two governments, to restate the substance of our program and the tremendous bearing it has on both the business and the peace situation of the world, with such emphasis on important [Page 792] phases of it as might be calculated to impress the Ambassador. I referred especially to the unfortunate delay of many other important countries in taking up something like our trade agreement program for international business recovery. Finally, the Ambassador spoke about the pending trade negotiations between our two governments and said that the treaty was ready for signature save as to the blocked exchange situation, and he added he did not know what could be done about that. I then repeated the arguments we are making to all important countries in Europe about the necessity for abandonment of the bilateral and discriminating trade policies and the substitution therefor of the long view and broader policy based on equality. I also expressed my disappointment and regret that the exchange situation in Spain was calculated to retard the treaty negotiations, adding that we were obliged to keep substantially within the limits of our trade agreement program in order to appeal to other nations for its support. I stated that I earnestly hoped his government would find a way to avoid turning over to other countries all exchange accruing under unfavorable trade balances in accordance with the purely bilateral method and policy of bartering and bargaining, together with clearing arrangements, and apply to their exchange situation the doctrine of equality—just as the United States Government had applied it when its trade agreement with Brazil was entered into some months ago. I strongly insisted that this entire program in its essentials offers the only solution to the steadily increasing condition of danger in Europe.

C[ordell] H[ull]