Office of the Historian

033.1100 ST/11–154

No. 923
Memorandum by the Director of the Foreign Operations Administration (Stassen) to the Secretary of State1

top secret
Washington, November 1, 1954.
  • Subject: Spain Trip—October 27–29, 1954
I.
From my conferences with officials of the Government of Spain, which have been reported in Embassy cables from Madrid and from my talks with the United States country team in Madrid, I have the following impressions:
a.
The Government of Spain and the business leadership of Spain are proud of their partnership relations with the U.S. and will extend themselves to make it successful. They believe it will be very much in their interest to do so.
b.
The base construction program and the expanded Spanish defense program will together have a powerful inflationary effect within 12 to 18 months.
c.
General Franco and the members of his Council of Ministers do not understand the importance of NATO to the United States and are generally lacking in broad information or understanding of the world-wide situation.
II.
Suggested U.S. courses of action for such consideration as may be deemed appropriate:
a.
Facilitate the expansion of electric power within Spain to overcome critical shortage, and with this encourage the expansion of internal production of basic consumer goods to counter the inflationary impact.
b.
Introduce sufficient consumer goods and raw materials in the U.S. aid program to meet urgent demands.
c.
Periodically review Spanish internal defense plans to avoid impossible internal economic burden which would cause unmanageable inflation and would be followed by unstable situation surrounding our valuable air bases.
d.
Arrange intermittent visits of U.S. officials to Spain to facilitate the understanding by General Franco and his associates of U.S. policy and the world situation.
e.
Enlist through U.S. good offices the participation of Germany, U.K., Netherlands and France in long term development credits to Spain and the avoidance of excessive short term trade credits.
f.
The President or the Secretary of State to make a comment at an appropriate time to the effect of the continued importance of our agreements with Spain now that the Western European accord has been worked out at Paris.
H. E. S.
  1. This memorandum was also addressed to the Secretary of Defense, the Special Assistant to the President for National Security Affairs, and the Chairman and the Executive Officer of the Operations Coordinating Board. Stassen, Riley, Urschel, and Ringer, all of the Foreign Operations Administration, visited Spain, Oct. 27–29, in the course of a trip which included visits to Yugoslavia, Oct. 24–26, and Italy, Oct. 26–27. A memorandum reporting on the visit to Italy, dated Nov. 1, which Stassen sent to the Secretary of State and other U.S. officials, is Document 989. Stassen summarized his conclusions in a separate memorandum to President Eisenhower, Nov. 1. (Eisenhower Library, Eisenhower papers, Whitman file) A memorandum of two conversations held between Stassen and Arburua in Spain is Infra.↩