The Secretary of State to the Ambassador in Spain (Weddell)
229. Your 490, September 7, 11 a.m. It is suggested that you discuss this matter with the Spanish Government along the following lines; this Government is cognizant of the economic difficulties facing Spain and desirous of sustaining all possible economic relationships between the two countries which may be mutually beneficial and would be in general disposed to consider plans for cooperation looking towards the economic rehabilitation of Spain. However, the Spanish Government must realize we could only justify action if there is sufficient assurance that it would be in accordance with those general principles of international relationship for which this Government stands, and if it was reasonably certain to produce a genuine and lasting economic result—which would be the best assurance of repayment.
The political principles to which reference is made have often been stated and for a summary of them you are referred to a communication which was addressed by this Government to all nations in July 193719 and the address delivered by me at Havana on July 22, 1940.20
You should have in mind that the recent reports arising out of conversations held in Berlin and of possible Spanish entry into the war of course give rise to fears, and point out that financial assistance on our part at this time would have to take into account questions concerning prospective Spanish policy. In addition, of course, if Spain is again called upon to expend economic effort in war the major or financial risk would be increased.
We are willing to continue discussion with the Spanish Government of this whole question in the light of the preceding observations.
Naturally the specific nature and extent of the credits that might be made available would depend on what credit facilities were available here, the existence of surplus commodities for export and possible repayment arrangements. Furthermore, there would have to be reassurances regarding possible reexport from Spain of commodities acquired by means of any credit.
For your information, apart from the foregoing, the general subject of relief in Spain has been discussed informally with Mr. Norman [Page 809]Davis21 who has indicated the interest of the American Red Cross in possible extension of assistance by it to meet such urgent relief requirements. Mr. Davis has informed the Department that he believes it possible for the Red Cross to make available substantial sums for shipment of wheat or other foodstuffs to Spain, subject to appropriate assurances from the Spanish Government that such shipments would not be diverted to any other use and satisfactory arrangements can be made for distribution to the needy population in Spain.