852.6363/697: Telegram

The Ambassador in Spain (Hayes) to the Secretary of State

501. Department’s 368, February 19.4 The purpose of Embassy’s despatch 5784 was to obtain a policy ruling regarding aviation supplies to Spain.

During the past 6 months consumption has averaged 700 tons monthly of which 420 tons was 87 octane. The proposal is to supply 420 tons 87 octane monthly or preferably 74 octane convertible to 87 octane by CAMPSA5 of which the Air Ministry expects to set aside 100 tons for military use, leaving 320 tons for Iberia6 whose current consumption is 320 tons monthly as shown in attachment to despatch 578. It is proposed to furnish an additional 30 tons monthly of 100 octane if Spanish Government decides to acquire three United States Army transport planes which our Government has expressed willingness to sell. This quantity should be increased proportionately if other American and British non-confidential military planes forced-landed in Spain are sold to the Spanish Government as both British and American Governments have agreed.

Following is aviation stock position in tons: 87 octane, January 1 CAMPSA stocks 1960 deduct Axis stocks 150 add stocks at airports 150, balance Spanish stocks 1960, consumption January, February 840, balance March first 1120 immobilized in tank bottoms minimum 600, free stocks 520 equivalent to 6 weeks’ supplies—until April 1.

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80 and 70 octane: March 1 CAMPSA stocks 1400 add stocks at airports 500, total 1900 immobilized in tank bottoms minimum 600 monthly consumption 280. Stock will last until July 21.

83 octane: 263 tons shown in despatch are estimated to last until July 31.

Above stock figures include all military and naval stocks and all other stocks.

Suitability of above octanes is explained in despatch 578.

No threat of any kind was implied by the unofficial and confidential comments made by a friend in the Air Ministry who believes that the Germans true to form would insist on controlling Iberia policy if they supplied aviation products. Comments in our despatch referred to possible control of Iberia services and not of capital stock. We repeat the Air Ministry has made no threats nor suggested concessions to anybody.

Ministry of Economic Warfare’s attitude as stated in Department’s cablegram under reference, last paragraph,7 is not shared by the British Embassy which strongly concurs in our views that aviation gasoline supplies constitute an essential part of the general petroleum program which has been such an important factor in developing and maintaining satisfactory relations with Spain.

Reference Department’s 324, February 13,8 we are reliably informed Iberia capital stock is held as follows: Spanish Government 51%, Spanish private interest 24.5%, Lufthansa 24.5%. Lufthansa obtained this interest in 1940 in exchange for airplanes and aviation equipment.

Board of Directors consists of eight Spaniards and one German but policies and operation of services are under close control of the Air Ministry. Political character of management considered satisfactory. Reported predominantly monarchistic.

I favor a reasonable aviation supply program in line with the basic policies governing the general petroleum program and therefore recommend Department’s approval of the proposal submitted in Embassy’s despatch under reference. Since proposed quantities are small and commitments are limited to 1 month’s supplies effective control can be exercised.

In view of the critical stock situation as shown above an early reply is urgently requested.

Hayes
  1. Not printed.
  2. Not printed.
  3. Compañia Arrendataria del Monopolio de Petróleos, Sociedad Anónima.
  4. Reference is to Iberia Airlines.
  5. Last paragraph of telegram No. 368 stated that the British Embassy had informed the Department that the Ministry of Economic Warfare was opposed to supplying any available gasoline to Spain (852.6363/632).
  6. Not printed.