Foreign Relations of the United States, 1958–1960, Western Europe, Volume VII, Part 2

327. Memorandum of Conversation⁰

March 23, 1960, 11:15 a.m.

PRESENT

• The President
• The Secretary of State
• Ambassador John Lodge
• Deputy Assistant Secretary of State Ivan White
• Foreign Minister Castiella
• Ambassador Areilza, Count of Motrico
• Mr. Jaime Pinies
• Lt. Colonel Vernon Walters

After the opening amenities, the Foreign Minister said that the memory of the President’s visit to Spain was still vivid and it was not just Madrid that had greeted him but the whole of the country. The visit had been a complete success. The President thanked him and said that he had been very happy to have the opportunity to visit Spain. He had been greatly impressed by Madrid as it was his first visit there and he had not realized how large and modern the city was.

The Foreign Minister then said that in Spain they had followed the President’s visit to South America and asked the President how things had gone. The President gave him his impressions briefly. The Foreign Minister said that the Spaniards felt that the Communists were making a great effort to turn the countries of Latin America against the United States and the West and were even using Spanish agents to do this.

The discussion then turned to the economic stabilization effort of the Spanish Government. The Foreign Minister said that the Spanish Government was making a real effort in this area and that results were already beginning to show. From an unfavorable balance of payments they now had over $200,000,000 of reserves, but that the country was still under “the shock of stabilization.” Further efforts were required to pursue the economic development of the country but that these had to be undertaken with great care not to create an inflationary situation. The Spanish Government was determined to pursue a policy of financial orthodoxy. The President expressed his satisfaction on hearing this. Minister Castiella said that recently the Austrian Finance Minister, Mr. Kanitz(?)¹ had been in Madrid and had talked to the Spaniards about Austria’s experience in financial stabilization. They too had had this period of “shock of stabilization” and it had lasted about eight months. There had been great pressures from both labor and management to take remedial action of an inflationary type but that the Austrian Government had stood firm and had emerged successfully from this period. The Spaniards were determined to do the same. The President smiled and said that these two pressures were also felt here whenever there was a slight recession in business activity.

The Foreign Minister then said in reply to a question from the President that he would go to New York on Friday and then spend a few days in Florida before returning to Spain. He also said that he had had very satisfactory talks with the Secretary of State and that he had had fully informative talks with him.² Likewise he had spoken to the Secretary very frankly.

The Foreign Minister then said that the Generalissimo had asked him to deliver a personal letter to the President.³ He then handed the letter to the President who read it and said that he had read it with some speed but did not see anything with which he disagreed. He said that he agreed with General Franco that peoples must work on their own behalf. He asked whether the Secretary of State had seen the letter and the Secretary replied that he had not.

Mr. Castiella said that he knew that the President was extremely busy and he did not wish to take up his time. He did wish to mention a subject that the President had brought up in Madrid with General Franco and that was the situation of Protestants in Spain. He wished to tell the President that this matter would be satisfactorily solved in the near future. The President said that he was very happy to hear this as it would certainly be helpful to Spanish-American relations. Mr. Castiella said that he had worked on this matter every day since the President had been in Madrid. The Spanish government was working out a solution that would be permanent. One that would have the support of the Spanish hierarchy and would not be brought back into discussion. There were certain fanatical extremists in Spain and they had to be overcome. He had negotiated a Concordat with the Holy See and even though there had been general agreement between the two parties, it had still taken a year and half to reach final agreement. He wished to assure the President that this problem would be solved in a great deal less time than that. He had himself discussed the matter with Selwyn Lloyd when in London.⁴ He had also taken steps on becoming Foreign Minister to compensate the Bible Society for the unjust confiscation of some of their property amounting to several thousand pounds. He thanked the President for bringing the matter up during his visit to Spain as this had helped move the matter towards a solution.

The President said that he did not wish to make any premature statement but that if the Spaniards felt at some point that some public statement might be made, he would appreciate it if they would let him know so that he could make appropriate mention of it. The Foreign Minister said that he would do this.

The President then asked about living costs in Spain and the Foreign Minister replied that while there had been a rise, it was still one of the cheapest countries in Europe. There were some 300,000 U.S. tourists visiting the country annually (as against 4500 in 1947 according to Ambassador Lodge). Mr. Macmillan told him in London that there were some 400,000 British tourists visiting Spain every year. In fact Selwyn Lloyd had been to Spain for his vacation every year for the past ten years. He said that there were three great tourist areas. The Costa Brava between Barcelona and the French border, the area between Malaga and Gibraltar and the Balearics. Recently, there had also been a great increase in tourism from the Northern countries to the Canary Islands. He concluded by issuing a warm invitation for the President to visit Spain again upon the conclusion of his term as President.

The photographers then entered the President’s office and the conversation concluded.

0. Source: Eisenhower Library, Whitman File, International File. Secret. Drafted by Goodpaster. The meeting was held in the President’s office in the White House. White and Lodge also drafted a memorandum of this conversation, which was subsequently divided into four separate memoranda covering Franco’s letter, the Spanish stabilization program, Spanish Protestants, and tourism in Spain. Copies of these memoranda are in Department of State, President’s Memoranda of Conversation: Lot 66 D 149. A summary of the conversation was transmitted to Madrid in telegram 1343, March 24. (Ibid., Conference Files: Lot 64 D 559, CF 1616)
1. As on the source text. Austrian Finance Minister Reinhard Kamitz addressed the Madrid Chamber of Commerce on March 16 on “Modern Aspects of Monetary and Fiscal Policy.”
2. See Documents 322–326.
3. Document 320.
4. Following his meeting with the President in London (see Document 315), Castiella discussed various questions with British officials until September 3, 1959.