711.52/316: Telegram

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

257. Jordana today denied that the Spanish Government had made any decision concerning the manner in which the Germans may spend the pesetas made available to them for the debt settlement.

He said that he was preparing a counter-proposal to our request for a wolfram embargo. He trusted that a prompt solution of the wolfram problem could be found, especially if we were willing to supply Spain with armaments.

I asked him to arrange for the Germans to be denied export permits for wolfram pending the conclusion of our negotiations. He said he would do what he could along these lines. He said he hoped rapid progress could be made also toward the solution of other pending problems.

I made clear that if our problems were not solved our whole economic policy toward Spain would have to be reconsidered. He did not mention petroleum to me but complained that radio and press attacks, especially from Great Britain, were making it particularly difficult for him to obtain much-needed collaboration from his colleagues. See my 256, January 27, 7 p.m.27

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