852.00/7468: Telegram

The Ambassador in Spain ( Bowers ), Then in France, to the Secretary of State

459. Defeat in first naval battle and loss of the Baleares, the flag and star ship of insurgents, severe blow to Franco’s prestige, and rebel papers thus far have suppressed the slightest references to it. Prieto’s claim to have created a new navy as well as army not improbable. Government now has advantage in ships and if crews and officers are now trained effect on the war far reaching.

2. Understood here that 5,000 more troops from Libya just landed at Cadiz, half from Italian hospital ship Gradisca, half from warships including destroyer flotilla. These said to have been sent to Guadalajara front. Bay may be able to verify since troops would have gone through Seville.

Bowers