811.20 Defense (M) Spain/671: Telegram

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

910. Embassy’s 899, April 14, 10 a.m.29 At a meeting of Anglo-American Committee to consider resumption of trade between Peninsula [Page 27] and North Africa the following unanimous recommendations were made and are submitted for urgent consideration:

That a special committee of NAEB to handle peninsular trade be set up on which French should be represented. In Madrid questions relating to North African trade should be under direction of the Anglo-American Committee to which French representative should be added for that purpose. These two committees would handle policy and supervise trade.
That the UKCC and USCC should jointly act as consignors and consignees and should collect payments and make disbursements at each end. All shipments to North Africa whether for civil population or the Anglo-American forces would be handled in this way for the present. This is acceptable to the Spanish authorities.
That negotiations with Spanish authorities be undertaken by Madrid committee through its representatives. A formal agreement is not contemplated. First objective of negotiations with the Spaniards will be to effect resumption of North African trade as soon as possible by arranging a program of phosphate shipments to Spain and return cargoes of Spanish goods now available (e. g. pyrites) in Spanish ships. Other goods to be added later.
That the pesetas derived from exports from North Africa to Spain should be used exclusively for payment of exports from Spain to North Africa and transportation charges. But to provide funds for relief and other purposes the Madrid committee would endeavor to obtain the release to the representatives of the French North African authorities of the peseta balance due the Sherifian Government under the last French Moroccan-Spanish agreement representing about 8 million pesetas.
Token shipment of 10,000 tons of phosphates. In view of undertakings given to Spanish Government and the promise that those phosphate shipments would be resumed at the beginning of April Anglo-American Committee also recommended that in order to avoid further delay token shipments should be dealt with outside the proposals outlined in the previous paragraphs.
The foregoing recommendations have been made by the committee with the following factors in mind:

It fully recognizes desirability of French representation. At the same time it seems more than likely that the balance of payments of trade between Spain and North Africa will in due course run heavily against the latter and the deficit will have to be made up by pesetas derived from exports from the sterling and dollar areas. In this and other ways this trade is inexorably joined to the supply purchase arrangements and therefore must be controlled in connection with it. Accordingly the recommendations set out in this telegram seem to [Page 28] the committee best means of effecting this control, having regard to French susceptibilities.

Repeated Algiers, London and Lisbon.

  1. Not printed.