The Birmingham age-herald., 1918-02-01
FOLLOWING SPANS ANTEALU|ED ACTION AMERICA RETAL|ATES
Certain Ships Ready to Sail Are Held Up Pending Clearing Up of
 Situation

Washington. January 3f.-Quick re- taiiatory measures were forecast here tonight as the answer of the tnttea States and the alIies to Spafns inter ference with the shipment of goods ncrosx her frontier to France. In fact. certain Spanish ships now in Ameri- can ports ready to sail are being held up pending n clearing of the situn- tion, although the trade commits sion. in n formal statement denied that vessels under the Spanish flag gem orally were being kept in port.
 The American government is par tieularly concerned in the situation because of large orders placed in spain by General Pershing for sup plies for the American army. It holds, too, the chief weapon to force a lift ing of an embargo placed by Spain, since Spain draws heavily on the Uni ted States for foodstuffs.
 STATEMENT ISSUED
 The war trade board, which issued export licenses and licenses for bunker coal, in it's statement said:
 Tt is not correct that Spanish ships arc being generally held up by means of refusing bunkers or otherwise. It. is expected further clearances will be granted Each case is dealt with on its own facts and in few cases bum l1er license have been withheld. as where a ship has been loaded in whole or in part with commodities as to which export licenses could not be al- lowed under the policy of the war trade board"
 No comment other than this state ment was to be had officially at the war trade board offices concerning the Spanish situatio
 Allied officials have been given no end of perpleXity by Spain. Although net situated geographically as to ship supplies readily into Germany, charges have been made that goods from Span ish Morocco have gone through the Swiss port of entry in France into Switzerland and thence into Germany. Charges also have been made that the German spy system has used wireless equipment in Spain to communicate with the central powers.
 GERMOPHILE SPAIN
 X considerable element in the Span isl, government, it is well known, is German in it's leanings and officials in Washington express no hesitation in intimating that this element is i'll a large measure responsible for the present trouble. The official reason given for the blocking of General Per shing's order is said to be that the Spanish railroad system has broken down and that it is impossible to han dle goods destined for France.
 Through their control of bunker coal the allies are in position to stop not only the shipment of goods to Spain from the allied countries. but from neutrals as well, consequent1y they are in position to bring powerful pr assure to bear to insure fair treat ment in the Spanish markets.
 EXCHANGE ADJUSTED
 Adjustment of foreign exchange rates with Spain, to remove the pre- miun which American business men are paying now in commercial trans actions with that country, is another problem waiting to be solved. It will be one of the financial questions to be considered by Secretary McAdoo and Lord Reading, when the new Brit ish ambassador reaches Washington.
 Treasury department officials have been worried lately by the failure of the Spanish exchange rate to decrease III spite or the fact that the balance of trade amounts to $150,920,705 ill America's favor for the first II months of 1917, the latest figures availa ble On November 30 the peseta. ordinar- fly worth $.193. cost $242S i.l New York for transfer by cable to Spain
 In searching for a reason. it was found that the trade between Spain and the allied countries was largely in favor of Spain, and that this differ eEce was being paid through New York from the allies credits in this country, in order to take advantage of the more favorable exchange rate. This has caused the rate to advance to Americas disadvantage, although it still remains less than the rate in Eu- ropean countries.