811.20 Defense (M) Portugal/1496: Telegram

The Minister in Portugal ( Norweb ) to the Secretary of State

1416. In my meeting with Salazar this afternoon, he presented three proposals identical to those reported in my 1407, May 10, 4 p.m. [Page 105] He favored the first proposal since it would eliminate the problem of control of neutral production. Moreover, he was prepared to tighten existing controls and would welcome suggestions from our experts to that end. Salazar’s estimate of annual German mine production was 900 tons, and he expressed willingness to regard this figure as a ceiling for exports. He believed, however, that with rigid controls (presumably through reducing absorbing operations) actual production might fall short of this figure.

The burden of Salazar’s argument was that relatively and in terms of percentages this represented a more advantageous proposal than the agreement we had reached in Spain.

I informed Salazar that I was not in a position to make any commitments but that in accordance with his request I would place his proposals before my Government. My impression is that he hopes for a settlement based on one of these formulas and is now waiting for a counterproposal on the basis of limitations since he will not consider an embargo. He expressed the hope that these negotiations could be brought to a speedy conclusion.

The corporations will meet with the missions tomorrow to discuss details of the three plans, and a telegram embodying their analyses will follow.

At the conclusion of the conversation, Salazar said that he [wished?] to beg off discussion of any of the Azores matters today but assured me that he was giving them his full consideration.

Sent to Department; repeated to London as number 210 and to Madrid by courier as number 108.