811.20 Defense (M) Spain/968c: Telegram
The Secretary of State to the Ambassador in Spain (Hayes)
1653. USCCO 1499. 1. We are informed by British Embassy here that 95,000,000 pesetas in export licenses have been issued to UKCC63 by Spanish Government for British share of the wolfram. Of foregoing amount, reimbursement to the joint revolving fund has been made in the amount of only 10,000,000 pesetas. We understand that unwillingness of Spaniards to accumulate sterling beyond a certain level is responsible for this situation, and that until the present level of balances has been reduced by further exports from the UK to Spain, there will be no remedy for such situation.
2. Assuming the above to be correct, the revolving fund will be frozen indefinitely to the amount of 85,000,000 pesetas.
3. If your British colleagues agree, we therefore suggest that the transfer to dollars of the unused balance of the licenses already issued in sterling be requested of the Spaniards. It will be recalled that previously more licenses in sterling than in dollars were issued by the Spaniards for their own reasons, and that subsequent adjustment of this situation was made. The opposite is now the case, and it occurs to us that you might request the Spaniards to issue dollar licenses in a larger proportion at this time, the situation to be equalized and adjusted when more sterling may be available at a later date.
[Page 638]4. We feel that no action should be overlooked which will permit us in any way to obtain or keep funds in greater amount.
5. British Embassy here telegraphing as per above.
- United Kingdom Commercial Company.↩