Madrid Embassy files, lot 58 F 57, “320—U.S.–Spain”

No. 841
The Counselor of Embassy in Spain (Jones) to William B. Dunham of the Office of Western European Affairs

top secret

Dear Bill : I have shown your letter of January 30,1 with various enclosures, to Ivan White and Dan Anderson only. First let me say how very grateful we are for this complete and informative account of the present status of U.S. military and economic policy toward Spain. We haven’t had anything like it since the departure [Page 1805] of the two survey teams and it is altogether a most revealing set of documents. I think we have very little quarrel with your present policy objective of limiting economic assistance to the support of our military program in Spain—whatever that may turn out to be. We agreed with Sufrin on such a policy definition in the early days of his mission here and we still feel that that should be the policy framework of an economic assistance program here. It may be, however, that we give a broader interpretation to what we consider essential, economically, to support a military program. Certainly we feel that a general strengthening of the Spanish economy could only be a gain in terms of such support and that enormous military investment should not be jeopardized by a frail and continuously unhealthy economy. We also feel that Spain should not be made a special case in the spending of MSA funds but should be treated, in the implementation of an aid program, as any other European country if we wish to achieve in good spirit whatever military objectives will eventually be agreed upon in Washington. The Spanish Government has carefully studied the bilateral agreements and U.S. aid programs for other European countries and is fully aware of the kind of assistance which is going to Spain’s neighbors. While we understand that there must be quantitative limitations on Spanish aid, we urgently suggest that we appear to place no qualitative limitations which would be considered clear discrimination in relation to our treatment of other countries committed to the defense of Western Europe.

This is perhaps the place to emphasize our conviction that General Franco meant what he said when he talked to Admiral Sherman last June [July] about the need of economic assistance to support a policy of Spanish belligerency:

“He (Gen. Franco) went very thoroughly into the necessity to prepare a nation completely, in the economic as well as in the military field, for war, if that nation were to grant operating rights which would of necessity give the nation a belligerent status whenever those rights were used in war.

“He then developed Spanish needs for economic assistance and emphasized the need for economic preparation of Spain to withstand the vicissitudes of war. He mentioned the drain on the economic resources which would be inherent in its use as a base for military forces.

“I (Adm. Sherman) then commented on his last point, to the effect that while furnishing military equipment would not in itself constitute economic assistance, expenditures of funds to develop base or logistic facilities would inevitably be of help to the Spanish [Page 1806] economy. I said also that we were familiar with the economic problem, but that I could talk only in the military field.”2

We feel that the Spanish economic needs are so primary, that negotiations for economic assistance will have to be conducted simultaneously with military negotiations if we expect to make any progress on the latter. Further on this subject, we do not share the opinion of our former Chief that military negotiations are going to be easy.3 We believe the Spaniards are going to drive a hard bargain and that negotiations will be difficult and lengthy unless we are prepared to spend sizeable sums considerably beyond the $100 million which have presently been appropriated.

We also believe that the Spaniards would find the use of their counterpart funds for U.S. military objectives entirely unacceptable. In the first place, it has not been our policy with other European countries who have enjoyed relative freedom in the application of counterpart funds to the rehabilitation of various aspects of their own economy or their own national economic plant. Secondly, it would seem a doubtful basis on which to begin a military program in Spain in the light of the partial control which the Spanish Government would exercise over counterpart funds. Thirdly, it would deprive the Spanish Government of the anticipated dollar exchange which would normally result from the conversion of U.S. currency in a base-building program.

We were indeed shocked to read that the Department of Defense has made no provision for a military program in Spain for 1952 or 53, and wonder if there is not some mistake. As you remember, last summer or fall the President signed a bill4 authorizing an enormous base-building program in the U.S.A. and abroad, of a magnitude of somewhere around five billion dollars. An air base or port rehabilitation program for Spain is surely the kind of program that was envisaged in this Act and we find it hard to believe that, if the Spanish program is considered of sufficient importance, the Defense Department cannot tap this huge appropriation for what may be required. Incidentally, it is also shocking to contemplate that the only money that MSA or Defense now have to play with is not a result of their own foresight. After all the conversations, publicity and surveys that have been carried on in Spain and with respect to Spain over the past year, it strikes one as incredibly poor planning [Page 1807] that MSA and Defense now find themselves dependent upon the foresight of one Senator expressed in a last-minute Amendment.5 I sincerely hope that the good Senator will not be permitted to grab the ball again (which he has already announced that he will do) in the 1953 program for military and economic investment in Spain. We all hope it is not too late for the Administration to include Spain in its illustrative presentation of the country distribution of funds which will follow the President’s recommendations to the Congress for the MSA Authorization Bill of 1953. These illustrative presentations always get to the press sooner or later and the uncertainty and insecurity which would be generated in this country by the omission of Spain would, we feel, be unfortunate for our side and our policy objectives here.

We agree with you on the usefulness of the Technical Assistance Program in Spain. We do suggest, however, that we not lend technical assistance in a field in which we do not intend to make a substantial investment of economic aid. For example, do not send technical experts to Cataluña to give advice on the efficient operation of textile mills unless we intend to make MSA funds available for the purchase of raw cotton or do not send them to Andalucia to advise on the best means of combating the olive fruit fly unless we are prepared to make sufficient funds available in our economic aid program for the purchase of insecticides.

We will, of course, be greatly interested in seeing a copy of your first draft of a bilateral agreement for economic assistance as soon as it is available, particularly those portions dealing with the Benton Amendment.6 It is useful for us to know that it is based on the Yugoslav precedent,7 a point which we might carefully avoid mentioning publicly in deference to Spanish sensibilities.

In reading over the enclosures on JCS decisions and recommendations, it is apparent to us that the principal cause of delay on the Spanish program is the failure of the military to adhere to the original policy decisions approved by the President and cleared with our principal allies in NATO (NSC–72/68). By failing to stick to the limited objectives which had been approved, the JCS (and presumably Defense) have opened up wide the question of U.S. military policy toward Spain and put us right back where we were [Page 1808] a year ago. This failure to abide by the original terms of reference (paragraph 3b of your memorandum of January 24 to Matthews and Nitze 9) obviously leads to such indecisive and vague references to U.S. military policy as were ascribed to General Bradley in the fifth paragraph of Bissell’s memorandum of January 15 to Harriman.10 I do hope you in the Department will be able to get the military back on the track so that we can get started with the program in its original concept. I have no doubt that many of these additional military plans for Spain, such as the Army Department hopes for, will eventually become reality but they can all be worked out after the program has begun on the basis of the original NSC proposal.

We are not quite sure what you mean by the Paragraph 11–b on Page 5 of your memorandum of January 28 to Matthews and Nitze and would be grateful if you could spell that out for us in greater detail. With reference to the final considerations outlined under Paragraph 12 of your memorandum, we feel that the basis of criticism in the last sentence of 12–a and in 12–b is one in which the Department is on the weakest grounds. It seems to us here that the Department should not attempt to tell Defense and JCS how big or how little the defense effort in Spain should be but rather to emphasize the desirability of going ahead to whatever extent the military feel desirable within the framework of policy already approved.

With reference to your guess on Mr. MacVeagh’s arrival in Madrid, he told me when we visited him in Lisbon weekend before last that he expected to arrive here around the last of March. This was based on the following tentative schedule: (a) the NATO meeting would keep him in Lisbon until around the last of February; (b) two weeks’ consultation in Washington up to March 15; (c) return to Lisbon to pack up and make farewell calls the third week in March; and (d) motor from Lisbon to Madrid arriving here around the last week of that month.

If any of the above should prove helpful, we would be happy. Let me know if you would like any of it in telegraphic or despatch form. I want to reemphasize how helpful and useful it is to us to have the kind of information which you have sent us in your letter of January 30 and to ask you to keep us in mind as this situation [Page 1809] develops and send us another round-up as soon as you can of developments since the date of your letter.

Very sincerely yours,

John Wesley Jones
  1. Document 836.
  2. For a complete account of this conversation held on July 16, 1951, see the memorandum of conversation by Admiral Sherman printed in Foreign Relations, 1951, vol. iv, Part 1, p. 832.
  3. Ambassador Griffis expressed this opinion in despatch 425 from Madrid, Nov. 2, 1951; see footnote 9, Document 833.
  4. Reference is to the Military and Naval Installations Construction Act, P.L. 82–155 (65 Stat. 336), Sept. 28, 1951.
  5. Reference is to Senator McCarran and his insertion of the Spanish appropriations clause into the Mutual Security Appropriations Act of 1952; see footnote 8, Document 833.
  6. Section 516 of the Mutual Security Act of 1951, P.L. 82–165 (65 Stat. 373), Oct. 10, 1951.
  7. Reference is to the Economic Cooperation Agreement of Jan. 8, 1951; for text, see TIAS 2384, printed in 3 UST (pt. 1) 1.
  8. For the text of NSC 72/6, June 27, 1951, see Foreign Relations, 1951, vol. iv, Part 1, p. 820.
  9. Document 834.
  10. The memorandum summarized the status of preparations within the U.S. Government for negotiations with Spain. (DMS files, lot W–1425, “Spain”)