File No. 652.119/508
The Ambassador in Spain ( Willard) to the Secretary of State
[Received February 5, 10.05 a.m.]
1042. Department’s 864, February 2, 5 p.m., and Embassy’s 1041, February 3, 3 p.m.2 Tentative agreement Embassy’s 1029, [Page 1665] January 30, 10 a.m.,1 does grant Spain practically all she desires according to agreement, but in return therefor it secures (article 1) unrestricted exportation of those commodities which are absolutely necessary to our co-belligerents. Ratification of this agreement is conditioned on simultaneous ratification of French-Spanish financial agreement now under negotiation. Embassy is of opinion that establishment of credit here is vitally essential to French, and if not obtained that United States must either make France sufficient loan to enable her to continue her purchases here or supply her wants directly from the United States. Spanish good will should also be considered in this connection.
Approached Minister of State this afternoon in regard to chartering Spanish shipping above national necessities (Department’s 862, February 2, noon). He would express no opinion on subject but stated he would consult Minister of Hacienda and Minister of Marine and inform Embassy. Moreover, he showed great unwillingness to include in tentative agreement any further provision concerning shipping but wished to follow procedure set forth in article 13, stating that if this article was changed, all other conditions of agreement would be changed. At this point it was again impressed upon the Minister for Foreign Affairs that our agreement would not be ratified until the conclusion of French-Spanish agreement. Embassy has not been instructed concerning financial matters other than that it was to support French financial negotiations. French are endeavoring to secure credit of 40,000,000 pesetas per [month] for next eleven months, and French Ambassador states that they will not accept a less amount. Embassy thinks 35,000 bales of cotton per month is amply sufficient for Spain’s needs although a substantial part of this will be re-exported to France in manufactured goods. Belmont claims to have covered in tentative agreement all commodities needed for Pershing which can now be purchased in Spain and that there is no lumber immediately available in Spain.
Pending the conclusion of French negotiations, Embassy ventures to reiterate suggestions contained in its 9412 and that in the event of failure or inordinate delay of such negotiations that modus operandi suggested in Embassy’s 960, December 29, 11 a.m.,3 be rigorously enforced.