Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

Spanish Desk files, lot 58 D 344, “Agreements—General, 1954”

No. 916
Memorandum of Conversation, by the Director of the Foreign Operations Administration (Stassen)

Washington, April 20, 1954.

1. Both Mr. Stassen and the Minister¹ expressed great pleasure that the visit had been possible because of the better mutual understanding which was facilitated by direct personal contacts, and expressed the hope that continued visits and meetings between U.S. and Spanish officials in both Spain and the U.S. would follow.

2. The Minister explained that, as he had pointed out at the first meeting with Mr. Stassen, he had not come to America to make specific demands, but that he had wanted to make us aware of Spain’s economic needs.

3. Mr. Stassen said that he fully understood the Minister’s position in this regard. He stated that we recognize that it is important for the countries with which we have close military and political relations to be successful economically. The illustrative economic aid figure which is included in our Congressional material was developed before the full effect of last year’s drought was known to us and before the freeze had occurred. In the light of the information which the Minister presented, and which has come to us from other sources, he considered that we would want to find a way to provide some additional assistance. As to the amount and manner in which this might be done, it would have to be considered by all the agencies concerned in the light of Congressional action on the mutual security appropriation and other legislation. An agricultural surplus disposal program is one possibility. Specific programs would develop over a period of time during the coming year.

4. Minister Arburua mentioned the following specific measures which he thought might be helpful: (a) additional aid; (b) surplus commodity programs (the Minister re-emphasized that he considered the 42.5 pesetas to the dollar exchange rate included in the wheat transaction highly exceptional and not acceptable as a precedent); (c) relaxation of the agreement whereby counterpart is used for base construction, and (d) financing of defense support transportation facilities and defense production facilities from military aid rather than economic aid funds.

5. Commenting on 4 (d) above, Mr. Stassen said that he did not consider it desirable to supplement the economic assistance by reduction of military aid; that both were related and important. Minister Arburua indicated agreement.

6. The Minister stated that he had not actively explored the question of credit, e.g., with the Export Import Bank, because Spain is already burdened with a heavy schedule of loan repayments over the next 5 to 7 years. He mentioned a figure of $150 million. He indicated, however, that it would be possible to undertake obligations over a longer period in connection with aid financing of projects.

1. The Spanish party returned to Washington on Apr. 19 after having completed an 11-day tour of Chicago, Detroit, and New York.