Memorandum of Conversation, by the Acting Secretary of State

The Spanish Ambassador called to see me this morning at my request. I commenced the conversation by asking the Ambassador what the situation might be with regard to his negotiations with the Export-Import Bank for the facilitation of credits to the Spanish Cotton Syndicate for the purchase of American cotton amounting to 300,000 bales. The Ambassador said that he had heard nothing further from the Export-Import Bank in the matter in the last few days and that he was beginning to get very concerned lest this Government was not anxious to conclude these negotiations. I told the Ambassador that I had just spoken with Mr. Pierson5 on the telephone and that Mr. Pierson had told me that he was trying to locate the Ambassador in order to have an immediate interview with him and that I would consequently send word to Mr. Pierson that the Ambassador would call to see him after leaving the Department of State.

The Ambassador said he was very glad to know this since the matter in his opinion was one of very vital importance to the Spanish Government itself and one which would have a very great bearing [Page 828] upon that betterment of relations between the Spanish Government and the United States which he had so much at heart. He told me that his Government was confronted with financial difficulties which made it absolutely imperative that it obtain at least a two years credit for the purchase of the 300,000 bales of American cotton desired. I told the Ambassador that while of course I was not familiar with the details which had been discussed by officials of the Export-Import Bank and the Spanish Embassy, I did know that it was difficult for these officials to understand why the Spanish Government should be able to pay for cotton from other cotton producing countries on ninety day terms and yet insisted that they could only pay for American cotton on two year terms. The Ambassador replied that he understood that his Government had only purchased from other sources some fifty thousand bales and that this quantity would have been purchased in the United States if our own officials had been able to assure him that there was that amount of cotton available in the free market here. He admitted readily, however, that his Government should have informed him of these purchases made from other sources and expressed his regret that they had not.

I then said to the Ambassador that I was very anxious that this cotton transaction be concluded promptly on terms satisfactory to both sides and that I was sure he had already gained the impression that this Government desired to do what it could to smooth the way for a resumption of friendly and advantageous relations between the two countries. In view of that situation, I said, I had asked him to come in this morning in order to talk with him in complete frankness with regard to the situation that apparently was developing in connection with the treatment by the Spanish Government of the International Telephone and Telegraph Company. I said that in March Colonel Behn, the President of the Company, then in Paris had requested permission to visit Spain in order to discuss with the members of the Spanish Government the many questions that had arisen with regard to the Company’s properties in Spain. At that time he had been informed that permission would not be accorded until after recognition had been granted by the United States to the Spanish Government. I said that recognition had been accorded soon thereafter, but that during the eight weeks that had subsequently elapsed the Spanish Government had made it very clear that it had no present intention of granting Colonel Behn the right of entering Spain for the purpose indicated. I said I wished to make the position of this Government very clear and that was that Colonel Behn was a reputable American citizen representing the American owners of the International Telephone and Telegraph Company which Company in turn held properties valued at a very great amount in Spain. I said [Page 829] that this Government had every intention of upholding the legal rights of these American investments in Spain with exactly as much decision and exactly as much interest as it had in the past and that it could not admit that a refusal to admit Colonel Behn to enter Spain for a legitimate purpose in representation of these American interests was consistent with accepted international practice or with the ordinary standards of international equity.

Furthermore, I said I could not help but be disturbed by the apparent lack of candor on the part of the Spanish Government in approaching the problem presented by the interests of the Company in Spain. I said that all of this doubt and uncertainty and ground for suspicion which now existed with regard to this matter could be promptly cleared up if Colonel Behn were permitted to enter Spain without further delay to discuss with the appropriate Spanish authorities in a frank and friendly manner the matter in which the Company was interested and if the Spanish Government were then prepared to state unequivocally its intention of respecting fully, in accordance with the accepted standards of international law and practice, the legitimate and legal rights of this Company. I said that just as I was interested in doing what I appropriately could in furthering the successful conclusion of the cotton transaction, I trusted that the Ambassador would do what he could in clearing up the problem which I had outlined to him.

I stated that I wished to request that he communicate to his Government what I had just stated to him and I informed him that similar instructions had been sent by telegraph to Ambassador Weddell so that the latter might take the matter up also immediately after presenting his letters of credence.

The Ambassador said that he would make every effort to press for a satisfactory solution of the matter I had mentioned. He said that he would do so not only because of his recognition that the matter was one which had great importance in the eyes of this Government and on the part of public opinion in the United States, but also because of his personal conviction that what was asked was fair and reasonable and in the best interests of Spain. The Ambassador said, however, that he had not been aware of the incidents involved in the delay in granting Colonel Behn the right to enter Spain. I asked the Ambassador if he had any personal objection to Colonel Behn or if he knew of any reason why Colonel Behn should not be permitted to enter Spain. The Ambassador replied that on the contrary he believed Colonel Behn to be an extremely able man, an excellent “diplomat” and one against whom no legitimate question could be raised by the Spanish authorities. I said to the Ambassador that I was well aware that the criticism had been made by some of the Franco authorities [Page 830] that Colonel Behn had not permitted the Company to give any assistance to the Franco side during the civil war. I said, however, that Colonel Behn had not permitted the Company to give aid to the Loyalist government either and that it seemed to me that he had taken the only proper attitude for a representative of a foreign company doing business in Spain during a time of civil war, namely, to give assistance to neither side.

. . . . . . . . . . . . . .

I could find no sign of prejudice against the Company or against Colonel Behn on the part of the Ambassador. He was exceedingly frank and outspoken in his statement that he felt the Company’s properties should be respected and that Colonel Behn should be permitted to enter Spain without further delay.

S[umner] W[elles]
  1. Warren Lee Pierson, president of the Export-Import Bank of Washington.