711.52/3–2648
Memorandum of Telephone Conversation, by the Assistant Secretary of State for Political Affairs (Armour)
| Participants: | Mr. James Forrestal, Secretary of National Defense |
| Norman Armour—G |
Mr. Forrestal telephoned me and asked if there were any prospects of a change in our policy toward Spain. I said that although things were moving along, there was nothing at present. I said it looked a little more encouraging with respect to ERP; that our Chargé d’Affaires in Madrid has had one or two talks with General Franco and we were hoping there might be a change for the better in the internal lineup there. I said that the principal obstacle was the Minister of Commerce1 who is holding things up a great deal in the economic field.
Mr. Forrestal asked if this Government’s position would prevent U.S. commercial banks from making loans. I said that private loans could be made and that we would be glad to see them made. I said that the International Bank is a UN organization and that the Ex-Im Bank had not done anything so far. I said that if the Safe Haven negotiations are put through, Spanish assets over here would be released and that would give them about $50,000,000, and that they could then use the gold as collateral. Mr. Forrestal asked when I thought the agreement would be signed. I said that it was supposed to be signed within two or three weeks. I said that we all realized the importance of getting the agreement going. Mr. Forrestal said with them it was almost a matter of urgency. I said that if he had any suggestions as to timing he wished to send to us, we would be very glad to have them. Mr. Forrestal said he might send someone over to give us the background of the reason for this conversation. He asked if Mr. Lovett2 had returned. I said that he had. He said that he would keep in touch with Mr. Lovett.