811.20 Defense (M) Spain/1179: Telegram
The Secretary of State to the Ambassador in Spain (Hayes)
2439. Your 3302, November 11, 7 p.m. The Department approves in principle the proposals you have submitted. No difficulty is anticipated [Page 654] in connection with the proposal to suppress surcharging or the proposal to increase purchases of commodities in traditional trade. The Department cannot definitely say now that there will be no difficulty in making available free gold to compensate differences produced by a volume of exchange exceeding the cost of materials obtained by Spain from dollar and sterling areas, but this probably could be arranged (your 3066, October 21, 5 p.m.).
Of the three possible ways of demonstrating that the wolfram embargo will produce advantages for Spain outweighing the disadvantages, the Department naturally prefers the second, namely to demonstrate the importance to Spain of retaining the great advantages now derived from trade relations with this country. It is of course realized that the wolfram embargo, by effecting a decrease in German supplies to Spain, would increase the Spanish demand for supplies from this country. In view of the urgency of the matter the Department is unable to detail the increases that would be possible from our sources of supply. A study is under way and program will be submitted to you shortly but the Department does not wish you to await receipt of this. The Department anticipates little difficulty, inasmuch as the wolfram embargo would constitute an outstanding advantage for us, and would, in the opinion of the Department and FEA,84 help to shorten the war in Europe. If we can get the wolfram embargo and the other concessions mentioned by Mr. Atherton85 to Ambassador Cárdenas (Department’s 2411, November 10, 9 p.m.86) the Department will be in a very strong position vis-à-vis the supply and licensing authorities.
The Department is convinced that we must proceed rapidly on all these matters in order to achieve maximum results.
The British Embassy here has been advised of the contents of this telegram and will cable London urgently. As certain of your proposals, such as suppression of surcharges, are of immediate concern to the British as well as ourselves, please do not make such proposals to the Spanish authorities without first clearing with your British colleague. In the event your British colleague does not receive prompt instructions authorizing him to concur in the course of action suggested, the Department nevertheless wishes you to press the Spanish Government for an embargo on wolfram, leaving the quid pro quo (should such prove indispensable) for subsequent consideration between the British and ourselves.