853.24/140: Telegram

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

383. In connection with my telegram No. 381, February 27, regarding the question of price raising, I should like to invite the attention of those authorities in the Department who are concerned with questions of general policy to some of the connotations of the commercial differences which have recently arisen between ourselves and the Portuguese Government.

The actual interests to our country in dollars and cents of this present controversy over price raising is hardly greater than $1,000,000. The principle involved is one which the Portuguese consider to be of importance. The dispute has already affected our relations with Salazar and his Government and if we show no greater understanding of their sensibilities the resultant bad impression will not be easily or quickly overcome.

The reason that we are clinging to our present position now seems to be one that has little to do directly with our interests in Portugal. I am convinced that we do not need these price increases in order to assure our escudo position. Accordingly in the light of part I paragraph 3 of the Department’s 227, February 12, our main reason for insisting on raising prices to the Portuguese can now only be to make it easier for ourselves and particularly the British to carry out parallel action in Spain.

I have no doubt that the reasons why we are asked to do this are sound ones from the standpoint of economic warfare and preemptive buying. I should like to be formerly [to be formally assured?] however, that they have been carefully weighed in relation to our other interests in Portugal.

In this connection I should like to refer to my despatch No. 833, February 19,27 which should now have reached the Department. One question of considerable importance from the standpoint of our air transport between the United States, England and Africa is now pending before the Portuguese Government28 and its decision will depend largely on Salazar’s attitude toward us. Other questions of even greater moment may have to be raised with the Portuguese Government before the war is over. The Legation understands [that how?] these questions are being and will be considered is evidently being subjected to a certain amount of strain in deference to the preemptive programs of ourselves and the British in another country.

[Page 515]

The Department alone can judge the extent to which this is desirable and I can only express the hope that the merits of the case both political and economic will be carefully weighed in their entirety before further decisions are adopted in either field.

  1. Not printed.
  2. See pp. 527 ff.