The Secretary of State to the Ambassador in Spain (Hayes)
204. The Spanish Ambassador is expected to call at the Department tomorrow to inquire about tanker suspensions. He will be told that our whole economic policy toward his country is under reconsideration in the light of recent tendencies; while this country has supported and is prepared to continue to support Spanish economy, it is in the expectation of a cooperative response on Spain’s part. We have been able to develop an effective economic program which latterly has operated almost automatically. Against this an evident reluctance has been noticeable lately on Spain’s part to satisfy requests we deem both reasonable and important. The new financial arrangement with Germany18 threatens our economic warfare program, and we have had no satisfaction concerning our request for a wolfram embargo. We are discouraged with these developments and wonder whether for the sake of Spain’s economy we are justified in continuing our sacrifices while Spain continues to immobilize Italian ships, while German agents remain active throughout Spanish territory, while a belligerent attitude continues to be evidenced by the presence of some portion of a Blue Division on the Eastern Front,19 and while Spain furnishes Germany a right to expect a revival of imports from Spain. We feel that the Spanish Government should give to our problems and to that of Spain’s international position its most urgent and most earnest consideration while we examine the overall relations between Spain and the United States. We feel that it definitely is in Spain’s interest to render the fullest possible cooperation to the United Nations. The wolfram embargo, for instance, need not raise a question involving Spain’s neutrality if applied impartially. Moreover the Spanish Government cannot say that such an embargo would harm Spanish economy. This is no normal trade or industrial activity and the wolfram market will collapse the moment we withdraw. Wolfram activity has been created by our active competitive buying. The interest of Spain should be to prick this bubble at once and attend to the traditional trade of Spain with the United States, having in view a sound economy and postwar trade. Later on such an embargo will have no interest for us, and we require it now. The net result of further delay on Spain’s part will be damage to the normal trade and other prospects of Spain. As the Spanish Government has sometimes stated, there are involved political considerations of extreme importance, but [Page 303] the Spanish Government seems to have in mind a problem of deterring Germany from aggression against Spain, while we look toward the long range interests of that country after Germany’s defeat.
You should watch the internal situation with unusual attention at this time and report currently any important developments.