mentally a matter which can be successfully brought about by American action. The decision as to what steps can and should be taken is obviously one for Spaniards alone. At the same time, it is difficult to envisage Spain as a full member of the free Western community without substantial advances in such directions as increased civil liberties and as religious freedom and the freedom to exercise the elementary rights of organized labor. It is significant that one of the first acts of the new International Confederation of Free Trade Unions was to pass a resolution condemning the present government of Spain, and opposing any assistance to Spain "until such time as democratic and full trade union rights have been restored and the workers are once more able to make their contribution to the country's recovery.'

United States economic policy toward Spain is directed to the development of mutually beneficial economic relations. This policy is based on purely economic, as distinct from political, grounds. We believe that private business and banking arrangements and trade activities with Spain should be conducted on a free and normal basis. The Department interposes no political objections and restrictions on such activities.

So far as economic assistance from this Government is concerned, Spain is free to apply to and consult with the Export-Import Bank for credits for specific projects on the same basis as any other country. While the United States Government definitely does not favor the extension of a general balance of payments loan to the Spanish Government to use as it sees fit, it is quite prepared to acquiesce in the extension of credits to Spain covering specific and economically justifiable projects. It has been made clear to all Spaniards, both private and official, that Spanish applications for such projects will be considered on the same basis as those from any other country and the final decision will be made, in accordance with the Bank's regular policy, not only on the basis of the need for the credit and the suitability of the particular purpose to be served, but also on whether there is a reasonable prospect of repayment.

The successful development of mutually beneficial economic relations between the United States and Spain is entirely dependent upon the equal cooperation of both parties. Unfortunately, however, little progress has been made. The United States sincerely desires to facilitate normal business and trade with Spain, but ultimate success depends on the cooperation of the Spanish Government in taking constructive steps to promote its trade and to attract foreign investment. In order to assist in the development of these activities, the negotiation of a new Treaty of Friendship, Commerce and Navigation was offered by the United States. To date, the Spanish Government has indicated no interest in such arrangements. Efforts have also been made to encourage the Spanish Government to simplify its export and import controls and its foreign exchange system, which is based upon a multiplicity of rates, in order to establish an exchange rate which would permit Spanish goods to compete, particularly in the dollar market. Furthermore, efforts have been made to encourage the Spanish Government to lift the restriction of 25

percent on the participation of foreign investors in any Spanish enterprise and to accord better treatment to existing foreign investments, both of which are today distinct hindrances to the flow of investment to Spain. We have, in connection with these problems, pointed out to interested Spaniards and to the Spanish Government that the present critical situation in the Spanish dollar balance of payments seems to derive from difficulties many of which it is believed could be substantially rectified by action of the Spanish Government. To date, however, that Government has taken little action along these lines. In the Department's opinion the next steps to be taken in furthering mutually beneficial economic relations between Spain and the United States are up to the Spanish Government.

Sincerely yours,

DEAN ACHESON

76. MILITARY FACILITIES IN SPAIN: Statement by the Secretary of State, July 18, 1951 1

[Secretary Acheson made the following statement regarding the July 16 conversation between Admiral Forrest P. Sherman, Chief of Naval Operations, and Generalissimo Francisco Franco:]

Admiral Sherman's interview with General Franco on Monday has caused widespread speculation in the press, both here and abroad. The facts are as follows:

Military authorities are in general agreement that Spain is of strategic importance to the general defense of Western Europe. As a natural corollary to this generally accepted conclusion, tentative and exploratory conversations have been undertaken with the Spanish Government with the sole purpose of ascertaining what Spain might be willing and able to do which would contribute to the strengthening of the common defense against possible aggression.

We have been talking with the British and French Governments for many months about the possible role of Spain in relation to the general defense of Western Europe. We have not been able to find a common position on this subject with these Governments for reasons of which we are aware and understand. However, for the strategic reasons outlined above, the United States has initiated these exploratory conversations.

Any understanding which may ultimately be reached will supplement our basic policy of building the defensive strength of the West. It has been and is our firm intention to see to it that if Western Europe is attacked it will be defended-and not liberated. The presence of American armed forces in Western Europe bears witness to this intent as does the appointment, at the request of our NATO Allies, of General Eisenhower as Supreme Commander. 2

Made at the Secretary's press conference; Department of State Bulletin, July 30, 1951, p. 170.

2 See supra, p. 1505.

We are sending vast amounts of military and other aid to these Allies for whom a clear priority has been established. There will be no change in this procedure. In other words, the North Atlantic Treaty is fundamental to our policy in Europe and the closest possible cooperation with our NATO Allies will remain the keystone of this policy.

77. MILITARY FACILITIES IN SPAIN: Statement by the Secretary of State, March 12, 19521

Preparations have now been completed for negotiations with the Spanish Government regarding the use of military facilities in Spain. Since my last statement on this subject in July, a military team and an economic group were sent to Spain. After thorough study of the reports of these survey groups, the Department of State, with the Department of Defense, and the Mutual Security Agency, have made preparations for negotiations with the Spanish Government. These negotiations will involve the use by the United States of military facilities in Spain and, in that connection, the use of the $100,000,000 already voted by the Congress for aid to Spain.3

Negotiations will be opened with the Spanish Government immediately after the arrival of Ambassador MacVeagh. Military advisers have been appointed to assist the Ambassador. They will be headed by Maj. Gen. August W. Kissner, U.S. Air Force, and will also include Maj. Gen. Crump Carvin, U.S. Army, Capt. H. B. Sanchez, U.S. Navy, and Col. Jack Roberts, U.S. Air Force.

78. MILITARY FACILITIES IN SPAIN: Agreement Between the United States and Spain, September 26, 1953 *

Preamble

4

Faced with the danger that threatens the western world, the Governments of the United States and Spain, desiring to contribute to the maintenance of international peace and security through foresighted measures which will increase their capability, and that of the other nations which dedicate their efforts to the same high purposes, to participate effectively in agreements for self defense;

Have agreed as follows:

ARTICLE I

In consonance with the principles agreed upon in the Mutual Defense Assistance Agreement, the Governments of the United States 1 Department of State Bulletin, Mar. 24, 1952, p. 450.

2 Statement of July 18, 1951; supra.

3 See the Mutual Security Appropriations Act of 1952 (PL 249, 82d Cong., 1st sess., Oct. 31, 1951; 65 Stat. 730).

4 TIAS 2850; 4 UST 1895.

5 TIAS 2849; 4 UST 1876.

and of Spain consider that the contingencies with which both countries may be faced indicate the advisability of developing their relations upon a basis of continued friendship, in support of the policy of strengthening the defense of the West. This policy shall include:

1. On the part of the United States, the support of Spanish defense efforts for agreed purposes by providing military end item assistance to Spain during a period of several years to contribute to the effective air defense of Spain and to improve the equipment of its military and naval forces, to the extent to be agreed upon in technical discussions in the light of the circumstances, and with the cooperation of the resources of Spanish industry to the extent possible. Such support will be conditioned as in the case of other friendly nations by the priorities and limitations due to the international commitments of the United States and the exigencies of the international situation and will be subject to Congressional appropriations.

2. In consequence of the above stated premises and for the same. agreed purposes, the Government of Spain authorizes the Government of the United States, subject to terms and conditions to be agreed, to develop, maintain and utilize for military purposes, jointly with the Government of Spain, such areas and facilities in territory under Spanish jurisdiction as may be agreed upon by the competent authorities of both Governments as necessary for the purposes of this agree

ment.

3. In granting assistance to Spain within the policy outlined above, as the preparation of the agreed areas and facilities progresses, the Government of the United States will satisfy, subject to the provisions of paragraph one, the minimum requirements for equipment necessary for the defense of Spanish territory, to the end that should a moment requiring the wartime utilization of the areas and facilities arrive, from this moment, the requirements are covered to the extent possible as regards the air defense of the territory and the equipment of the naval units; and that the armament and equipment of the Army units be as far advanced as possible.

ARTICLE II

For the purposes of this agreement and in accordance with technical arrangements to be agreed upon between the competent authorities of both Governments, the Government of the United States is authorized to improve and fit agreed areas and facilities for military use, as well as to undertake necessary construction in this connection in cooperation with the Government of Spain; to station and house therein the necessary military and civilian personnel and to provide for their security, discipline and welfare; to store and maintain custody of provisions, supplies, equipment and material; and to maintain and operate the facilities and equipment necessary in support of such areas and personnel.

ARTICLE III

The areas which, by virtue of this Agreement, are prepared for joint utilization will remain under Spanish flag and command, and

Spain will assume the obligation of adopting the necessary measures for the external security. However, the United States may, in all cases, exercise the necessary supervision of United States personnel, facilities, and equipment.

The time and manner of wartime utilization of said areas and facilities will be as mutually agreed upon.

ARTICLE IV

The Government of Spain will acquire, free of all charge and servi tude, the land which may be necessary for all military purposes and shall retain the ownership of the ground and of the permanent structures which may be constructed thereon. The United States Government reserves the right to remove all other constructions and facilities established at its own expense when it is deemed convenient by the Government of the United States or upon the termination of this Agreement; in both cases the Spanish Government may acquire them, after previous assessment, whenever they are not installations of a classified nature.

The Spanish state will be responsible for all claims made against the United States Government by a third party, in all cases referring to the ownership and utilization of the above-mentioned land.

ARTICLE V

The present Agreement will become effective upon signature and will be in force for a period of ten years, automatically extended for two successive periods of five years each unless the termination procedure hereafter outlined is followed.

At the termination of the first ten years or of either of the two extensions of five years, either of the two Governments may inform the other of its intention to cancel the Agreement, thus initiating a consultation period of six months. In the event concurrence is not reached on extension, this Agreement will terminate one year after the conclusion of the period of consultation.

In witness whereof the respective representatives, duly authorized for the purpose, have signed the present Agreement.

Done at Madrid, in duplicate, in the English and Spanish languages, both texts authentic, this 26th day of September, 1953.

[REPORT ON UNITED STATES RELATIONS WITH SPAIN: Address by the American Ambassador to Spain,' December 10, 1955

1 John Davis Lodge.

2 Department of State Bulletin, Jan. 9, 1956, pp. 43-48.