711.52/421: Telegram
The Ambassador in Spain (Hayes) to the Secretary of State
[Received April 21—9:52 a.m.]
1375. Should I interpret your April 17 midnight to London repeated to us as 10663 to mean that our Government is no longer willing to agree to the proposal embodied in your 936, April 4, to which British Government also agreed in identic instructions to Hoare and which agreement I conveyed to Jordana on April 8 (my 1218 April 8)?
Should I understand also that Department is no longer willing to agree to alleged proposal contained in its 979, April 7, which while never made by the Spanish Government involved shipments of wolfram of 17 tons per month beginning in April?
The proposal submitted by George in my 1347, April 18, has now been modified by Carceller in the sense that 20 tons per month would be shipped in May and June and 40 tons per month during the remainder of the year. Carceller says he has obtained Franco’s approval [Page 392] to this proposal and suggests our reply be given to Jordana. Should I assume that this proposal which differs from Jordana’s proposal to the extent that 20 tons less would be shipped prior to June 30 is unacceptable to our Government?
Jordana is awaiting a reply to his counter proposal contained in my 1218, April 8, 10 p.m., which probably now has been modified in fact by the Carceller proposal referred to above.
I assume the Department will instruct me when it wishes me to inform Jordana of our present position and will supply me with a statement of our present position in precise terms.
With specific reference to your 1066, April 17, midnight, and to previous conversations between officers of the Department and Halifax it is my opinion as I told Hoare recently (my 1341, April 18, 10 p.m.) that the British are necessarily underestimating the possibility that the Spaniards will give way on the matter of wolfram shipments to Germany prior to June 30 and that the British are unnecessarily discounting the great pressure on Spain resulting from its increasingly urgent need of petroleum products.
If therefore the difference between the American and British Governments has to do principally with wolfram exports up to June 30 I believe that a further effort should be made to induce the British to adopt a really firm attitude on that point and that we should endeavor once more to induce the Spaniards to forego such shipments.
If your conversation with Halifax indicates on the other hand that we are unwilling to enter into any agreement with Spain involving further shipments of wolfram to Germany at any time, then there are certain questions which immediately arise which I believe should have the Department’s consideration and concerning which I should appreciate receiving the Department’s judgment as soon as practicable.
If that is the interpretation to be given to your conversation it probably means that all exports from the United States to Spain will cease. If that is the case does our Government propose that Spanish funds in the United States amounting to some 20 million dollars would be blocked or will the Spaniards be permitted to utilize them for the purchase of petroleum and other products to be supplied by Britain and for direct purchases in Latin America?
If exports from the United States are to cease does our Government intend to permit imports from Spain of such commodities as wine, olives, pyrites, et cetera?
If we suspend all trade with Spain and petroleum is furnished by the British is it contemplated that we should endeavor to maintain control of imports and distribution of petroleum products in Spain or would that function be taken over by the British?
[Page 393]If the latter, are we content to withdraw from Spain a substantial number of intelligence agents engaged in communication with France?
Does the plan you may have in mind involve stoppage of USCC operations in Spain and withdrawal of USCC personnel?
Are we prepared to allow British to convert pounds into dollars for the purchase of supplies for Spain from dollar areas?
Are we prepared to run the risk of interference with the free evacuation from Spain of rapidly increasing number of American aviators to which probably will be added a large number of other military personnel and passage through Spain of other refugees in whose fate the War Refugee Board is particularly interested?
Whatever background you can furnish me in the foregoing and related matters will, of course, be helpful to me in my future conversations with the British Embassy as well as with the Spaniards. I shall not of course give any hint to the latter of what you may have in mind until specifically instructed to do so.
Repeated to London.