811.20 Defense (M) Portugal/663a: Telegram

The Secretary of State to the Minister in Portugal (Fish)

228. 1. The Department and BEW19 have discussed with British Embassy here contents of telegram no. 425 of February 2 from MEW to British Embassy Washington concerning new wolfram negotiations. We agree in general with four of the five basic assumptions set forth in the MEW telegram, namely (a), (b), (c) and (e). With respect to assumption (d), it is our opinion that it makes no real difference whether the expiration dates of the wolfram agreement and the supply purchase agreement are the same or different for the reason that, as wolfram is the strongest Portuguese card, they will [Page 506] presumably not sign it away at any time unless they have related it to the supplies they wish to receive from the US and the UK.

2. We agree that we might stand to gain by not attempting at this time to conclude a new agreement of long duration and we should be prepared to continue the present agreement until June 30 provided we can obtain satisfactory assurances that the Portuguese will not in the meantime give any long term commitment to the Germans which would prevent our bettering our position after June 30.

3. We therefore agree that a joint approach be made to Dr. Salazar by you and your British colleague along the following lines:

Dr. Salazar should be advised that schedules for Portugal for the 6 months beginning July 1, 1943 are now being prepared in Washington for consideration by the appropriate supply authorities and that, upon the basis of present forecasts, it appears that there is no chance of allocating to Portugal supplies at the same rate as provided for in the present program unless we can be assured of securing not only the production from the presently recognized British and American mines and concessions but also the entire amount of the free wolfram. In this connection, the MEW telegram no. 425 indicated that the stipulations would depend upon our acquiring the whole amount of Portuguese production of wolfram. This seems unrealistic for it is difficult to believe that the Portuguese would be willing to take from the Germans their own concessions.
Dr. Salazar should be requested to consider the wolf ram position in the above light and to advise you and your British colleague in due course of the best terms that Portugal can offer so that the matter can be presented to the supply authorities here.
If Salazar will not commit himself to a definite figure, or if he asks for time to consider the matter, or if he asks what will happen upon the expiration of the current agreement in the event no decision is reached, you and your British colleague should emphasize that we will not be content with anything less than the presently recognized British-American mines and concessions and the whole or nearly the whole of the free wolfram. But, you should then offer to recommend the continuation of the existing agreement on its present terms for a month or two in order to give Salazar opportunity for further consideration. In such event it should be made very clear that neither Washington nor London will agree to a continuation on the present terms unless Salazar assures us that no commitments will be made to the Germans pending the making of an agreement with us. In this connection it should be pointed out that the German Ambassador stated to the Portuguese authorities last year that the Germans would not be interested in wolfram this year. Furthermore, it should be stated to Salazar that we would expect that the current agreement will be strictly enforced and that measures will be taken to see to it that the Metals Commission does not discriminate against us as was recently the case.
In the event Dr. Salazar offers to give us less than 60 percent of the free wolfram in addition to the presently recognized British-American mines and concessions, you should state that you are sure [Page 507] that this will not be acceptable but you should offer to transmit the offer simply for our information.
If Dr. Salazar offers 60 percent or more of the free wolfram plus the presently recognized British-American mines and concessions, it is quite probable that the offer will be accepted. However, please do not indicate this to Salazar. It is our hope that we may be able to get as much as 75 percent of the free wolfram.

4. The British Embassy here is advising London of the substance of this telegram and it is hoped that your British colleague will receive similar instructions. If he does not or if you have any suggestions as to different tactics or procedure, please telegraph urgently.

  1. Board of Economic Warfare.