852.75 National Telephone Co./275: Telegram

The Secretary of State to the Ambassador in Spain ( Weddell )

46. Your 87, June 22, 8 p.m. For your information and background, the Under Secretary saw the Spanish Ambassador in Washington on June 28.9a Cárdenas was perplexed and disturbed by the long delay in the course of the negotiations which he has undertaken with the Export-Import Bank for the facilitation of credits to the Spanish cotton syndicate for the purchase of 300,000 bales of American cotton. He read a telegram from his Government stating that as a result of this delay Spanish textile industry was largely paralyzed and directing him to report by telegraph the reasons for the delay. His Government further informed him that if the reasons for the delay could be solved by action on the part of the Spanish Government such action would be taken, but if they were insuperable the Government would be obliged to modify drastically its policy with regard to cotton purchases. The Ambassador said he was much discouraged because he sincerely believed that the success of this negotiation would be a practical demonstration to the moderates of the present Spanish Government that the United States was willing to cooperate with it and that it would not be necessary for them to throw themselves completely into the arms of Germany and Italy. In his judgment the granting of the cotton credit would have an influence on Spanish policy altogether incommensurate with the intrinsic importance of the cotton deal.

The Under Secretary told the Ambassador that while it was impossible at this stage to explain to him in detail the reasons for the delay, certain obstacles had arisen which could only be surmounted [Page 836] by the President himself. He said, however, that the Ambassador could not overlook or ignore the great importance of the statements he had made to the Ambassador upon repeated occasions as to the lack of confidence which existed generally in Washington with regard to the policy which his Government would pursue with regard to legitimate American interests in Spain. He said that reports had reached him that the element in the Spanish Government which represented the Falange were determined to pursue a policy of nationalization and that if this policy included the confiscation of the properties of the American Telephone Company as well as other legitimate American investments in Spain, there would, of course, be little logical reason why this Government should proceed with the granting of credits to a government which intended to confiscate American properties. He urged him once more to obtain a categorical statement from his Government with regard to American interests in Spain along the lines he had previously indicated, including the pressing need for permission to be granted to Colonel Behn to enter Spain in connection with the telephone properties and he said that if such assurance were forthcoming the impression created here would necessarily be exceedingly beneficial.

As stated in the Department’s telegram 383 of May 29, 2 p.m. to you via Paris, the Department felt that the Spanish authorities’ attitude towards the International Telephone and Telegraph Company lacked frankness. The statements of the Foreign Minister reported in your 87 of June 22, 8 p.m., make the Spanish position in the matter even more confusing. If upon receipt of this telegram you have heard nothing further on the subject from the Spanish, you are requested to seek a convenient opportunity to broach again to the Minister of Foreign Affairs the subject of a declaration of the Spanish Government’s attitude towards American interests in Spain, including Colonel Behn’s admission to that country.

  1. Memorandum of conversation not printed.