811.20 Defense (M) Spain/1269: Telegram
The Ambassador in Spain (Hayes) to the Secretary of State
[Received March 12—4:09 p.m.]
828. One of Carceller’s closest associates who was present at luncheon mentioned my 817, March 9 subsequently called at Embassy [Page 364] to ascertain whether we could accept a modified formula if he could obtain assurances from Minister of Foreign Affairs of latter’s presentation of such a formula to Cabinet. He stated that apart from the Cabinet’s resistance to coercion a principal obstacle to a solution to the present impasse was certain definite commitments made by the Spanish Government to the Germans by which they could use any part of the considerable sums created by German exports to Spain for the purchase of wolfram. If we would agree to an arrangement whereby Spain might export to Germany 209 tons of wolfram and place Spain in position to deny German demands by purchasing the exportable wolfram surplus ostensibly as compensation for certain commodities which Germany could not supply to Spain he felt that Jordana and Carceller arguing separately could convince the Cabinet of desirability of accepting such a formula. This 209 tons could be released at the rate of 35 tons per month which roughly corresponds to production of German mines. This he pointed out would have several advantages of denying the Germans access to substantial sums accumulated for wolfram purchases, it would limit to an infinitesimal quantity having no wartime significance to us the amount of wolfram which the Germans would receive during next 6 months and it would tie in with the general scheme of Spanish Portuguese relations. He stated that Portuguese had been closely following our wolfram discussions with the Spaniards and are faced with dilemma of finding a formula which while partly meeting our demands would not deny the Germans access to wolfram produced by German mines in Portugal. If an arrangement such as proposed were consummated in Spain the Portuguese would probably follow in same path.
Needless to say he was informed of our desire for a full wolfram embargo and his interesting viewpoint concerning effect on our Portuguese negotiations was received without comment.
Repeated to Lisbon by pouch.