811.20 Defense (M) Spain/970: Telegram
The Ambassador in Spain (Hayes) to the Secretary of State
[Received August 24—2:25 p.m.]
2267. COUSC 1748. 1. Licenses for our share of June wolfram purchases amounting to roughly 53 million pesetas referred to in our 2256 August 22, midnight, COUSC 1747,68 have been definitely promised and we can expect reimbursement within the next day or two.
2. Applications have now been submitted for our share of July purchases amounting to 79,724,934 pesetas. Huete has informed us however that he will be unable to grant these licenses against dollars until his present swollen dollar balance is reduced substantially but he has agreed to accept free gold.
3. There has been no change with respect to the British share of wolfram licenses and the liquidity of the joint fund, aside from one small British contribution, is being maintained solely by the turnover we have succeeded in obtaining for our share.
4. The Germans are still out of the wolfram market. Assuming there will be no immediate change we will probably acquire about 250 tons of ore this month costing roughly 40 million pesetas not including tax. Moreover, stocks which are undoubtedly accumulating as a result of our price reduction may have to be bought at a moment’s notice if the Germans resume serious purchases.
5. Our financial position will permit us to carry through September at the present price and rate of acquisition but it will not enable us to employ the all-out methods necessary to combat active German competition, particularly with respect to the stocks now accumulating.
6. We again urge prompt and favorable consideration of Huete’s offer to accept free gold which we have consistently recommended as the only answer to an all-out wolfram campaign. Even now we could not operate effectively if the Germans should resume purchases tomorrow and there should be no delay in your decision.
Repeated to London.
- Not printed.↩