The Consul General at Algiers ( Wiley ) to the Secretary of State
[Received February 26—2:38 a.m.]
274. From Murphy. Department’s 205, February 6 , 2 p.m. We have learned from the Economic Secretariat that the French are going forward with Portuguese and Spanish negotiations on the basis of the accords in force prior to November 8.16 The situation is not, however, too clear because of the uncertainty in the minds of the Spanish and the Portuguese with regard to Axis reaction to negotiations with this area. Apparently, according to the French, they prefer to let the matter ride for the moment and to have the Portuguese go forward. Once an agreement is reached with the Portuguese the Spanish would then be in a position to explain to the Axis that the maintenance of peninsular economy made it necessary for Spain to conclude an agreement. There is likewise the question of whether they will negotiate with the Sherifian Government or with the High Command.
Presumably on the surface the arrangements would be concluded as with the Protectorate authorities. Bataille, of the Foreign Trade secretariat, however, takes the position that that is a detail of no importance so long as an agreement can be reached and trade reestablished and maintains that the negotiations will in fact be controlled by the High Command. Bataille proposes to proceed to Lisbon about the first of March in order to get the negotiations under way. He will have with him an expert representing the Protectorate and one representing Algeria. From Lisbon they will proceed to Madrid and later to London.
Pettit’s position in Madrid is of course established and the French feel that the present Chargé in Lisbon can be relied on. Bataille, however, seems to appreciate that any negotiations will necessarily be closely coordinated with our Missions in Lisbon and Madrid. [Page 13] He met Ackerman17 when the latter was here last month. We will have from Bataille before he leaves texts of the proposed agreements and a list of the commodities involved along with tentative amounts.
Number 1. I agree that it would be necessary for us to coordinate and determine, always in consultation with the military, the volume and character of any trade which may be established. Port facilities, et cetera, can take care of this trade provided it is properly coordinated as to time and character with other shipping and port problems. Final negotiations should be concluded here in Algiers on a tripartite basis provided of course that the Spanish and Portuguese send qualified persons here for such purpose.
Number 2. We shall of course wish to be kept currently informed as negotiation[s] proceed in Lisbon and Madrid.
Pettit is of course the proper French representative in Madrid and the present Chargé at Lisbon seems to have the confidence of the High Command.
Number 4. The French are proceeding on a basis of negotiating within the framework of the agreements in force prior to November 8.
Number 5. The French authorities propose to maintain entire control over the trade between North Africa and the Peninsula. There will, according to Bataille, be no private imports or exports. The High Command will deal with the private North African traders. In view of this fact it is our feeling that it would be preferable to let the French carry on this trade in their own way, always subject, of course, to close supervision or control by our Mission in Lisbon and Madrid and by NAEB here. We believe this is possible without interference with such programs of purchase and supply as we and the British may develop. In this way it would not be necessary to inject the UKCC and the USCC into the picture and unless there are particular reasons for bringing these organizations in it seems better to keep all these matters purely within the NAEB organizations. I am sure that if all trade were to be carried on through the UKCC the French would object most strenuously. If we can permit the French a fair degree of independence within certain limitations and proper navicert control, it would be better all around.
6. All of the points made in this paragraph strike us as logical and therefore we have no additional comment.
Repeated to Lisbon and Madrid. [Murphy.]