711.52/326a: Telegram

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

238. Following press release was issued last night:

“The loadings of Spanish tankers with petroleum products for Spain have been suspended through action of the State Department, pending a reconsideration of trade and general relations between Spain and the United States in the light of trends in Spanish policy. The Spanish Government has shown a certain reluctance to satisfy requests deemed both reasonable and important by the State Department, and concerning which representations have continuously been addressed to the Spanish Government for some time past. Certain Italian warships and merchant vessels continue interned in Spanish ports, Spain continues to permit the export to Germany of certain vital war materials such as wolfram, Axis agents are active both in continental Spain and in Spanish African territory as well as in Tangier, some portion of the Blue Division appears still involved in the war against one of our allies, and reports have been received indicating the conclusion of a financial arrangement between the Spanish Government and Germany designed to make available to Germany substantial peseta credits which Germany unquestionably expects to apply to augmenting espionage and sabotage in Spanish territory and to intensifying opposition to us in the Peninsula.

“This action has been taken after consultation and agreement with the British Government.”