852.6363/879: Telegram

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

W–21. Your 1300 May 18 and 1307 May 19.42

1.
In view of your emphasis upon fact that you have made some sort of commitment to the Spaniards that the Campilo could lift 4,000 tons of lubes on the present voyage, we are reluctantly authorizing it to load. This action is being taken much against our wishes and only because we consider we are forced to do so as a matter of good faith. Please see that every precaution is taken to insure that none of these lubes reach enemy hands. Clearance of this cargo of lubricating oils will bring imports of lubes for first half year in excess of program limits and will also create a July 1 inventory in excess of agreed limits, even making full allowance for abnormally large consumption in May.
2.
Under no circumstances should any further tankers be authorized to sail from Spanish ports without your first obtaining express approval from the Department. This approval should be requested for each tanker by telegram at least 10 days before the proposed sailing date from Spain. No commitment, direct or indirect, should be given prior to receipt of such authorization.
3.
Information telegraphed by Careaga43 concerning Zorrosa and Campanario is incorrect. We did not approve and do not intend to approve the sailing or loading of either of these vessels.
4.
There has been and is no intention that we will permit any carryover either from the last half of 1942 or from the first half of 1943. In making any recommendations for future loadings this should be borne in mind; the current permissible total rate of flow for each period will be determined in the light of all immediately pertinent circumstances.
5.
No statement should be made to the Spaniards in any form concerning the granting of any future petroleum supplies until you have received express authority from the Department.
6.
There are two basic limitations governing our supplies of petroleum to the Spaniards. First, we are not undertaking to supply petroleum beyond essential minimum needs, and have no interest in facilitating various branches of Spanish production at the present time since it is certain that supplies available to Axis would thereby increase. Hence it is not a desirable objective to seek to increase consumption beyond minimum levels as a means of justifying additional imports. The “absorptive” capacity of the Spanish market, apparently deemed by Smith (see his 1300, May 18, 11 p.m. to Thornburg44), is not to be taken as guide to amounts of imports; neither is the carrying capacity of the Spanish tanker fleet. Second, we do not wish to permit the building up of excessive stocks in Spain, whether these stocks are in the hands of CAMPSA or in the hands of other distributors or retailers. Hence the sudden switch of stocks from CAMPSA to other distributors or to retailers does not alter the facts that the stocks are in Spain.
7.
It must be borne in mind that by “inventories” we understand “maximum inventories”.
8.
As soon as your recommended program for the second half of 1943 is received, it will be studied and you will be advised of this Government’s decision. In this connection, we should emphasize that there is no present intention of altering our basic policy toward Spain. [Page 691] We merely consider it of extreme importance, pending further developments, that every precaution be taken to assure the achievement of the two objectives stated in foregoing paragraph 6, and that full and careful consideration be given to the shipment to and use in the Peninsula of such an important material as petroleum.
9.
Joint Chiefs of Staff have just communicated these recommendations:
(a)
Clearance should be given Spanish tankers to depart for the Dutch West Indies for cargoes only when it is clear that total inventories in Spain of a given product are such that upon tankers return there will be no material excess beyond agreed limits. This should be clearly understood by our Embassy in Madrid and the Spanish Government.
(b)
There is no foreseeable military reason why the proposal to restrict to 100,000 tons Spanish imports of petroleum products during the second quarter of 1943 should not be followed. As clearance has been given the six tankers, however, five of these should be permitted to take cargo and return even if this will allow imports of this quarter to reach about 135,000 tons.
(c)
The Joint Chiefs of Staff recommend the diversion of the sixth tanker to take fuel oil to Philadelphia after which it might return to Dutch Indies for next scheduled loading.

This will serve to clarify the Department’s position and to illustrate that in releasing the Campilo a concession is being made beyond the recommendations of the Joint Chiefs of Staff.

Hull
  1. Neither printed.
  2. Presumably José M. Careaga, Technical Adviser on Petroleum Matters at Spanish Embassy in Washington.
  3. Max W. Thornburg, Consultant on Petroleum Matters, Office of the Adviser on International Economic Affairs.