Arizona republican., 1918-02-01
RETALIATION FUR SPANISH ACTS MAY
 COME FROM ALLIES
Republican A. p. Leased Wirel

WASHINGTON, Jan. 31.-Quick re- taliatory measures were forecast here tonight as the answer of the United States and the allies to Spain's inter- ference with the shipment of goods across her frontier into France. In fact, certain Spanish ships now in American ports ready to sail are be- ing held up pending a clearing of the situation, although the war trade board in a formal statement tonight denied that vessels under the Spanish flag generally were being kept in port.
 The American government is partic- ularly concerned in the situation be- cause of large orders placed in Spain by General Pershing for supplies for the American army. It holds, too, the chief weapon to force a lifting of an embargo placed by Spain, since Spain draws heavily on the United States for foodstuffs.
 The war trade board which issued export licenses and licenses for bunker coal, in its statement said:
 Tt is not correct that Spanish ships are being generally held up by means of refusing bunkers or otherwise. It is expected further clear ances will be granted. Each case is dealt with on it's own facts, and in a few cases bunker licenses have been withheld as where a ship has been loaded in whole or in part with com modities as to which export licenses could not be allowed 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 situation. Allied officials have been given no end of perpieXity by Spain. Although not so situated geo. graphically as to ship supplies readily into Germany. charges have been made that goods from Spanish Morocco have gone through the Swiss port of entry In France to Switzerland and thence into Germany. Charges also have been made that the German spy system has usea wireless equipment in Spain to communicate with the central powers
 A considerable element in the Span ish government, it is well known, is German in its leanings, and officials in Washington express no hesitation in lntlmating that this element is in a large measure responsible for the pres ent trouble. The official reason for the blockade of General Pershings or ders is said to be that the Spanish rail- road system has broken down and that 1t is impossible to handle goods destined for France.
 Adjustment of foreign exchange rates with Spain, to remove the pre- mium 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 British ambassador reaches Washington.
 Treasury department officials have been worried lately by the failure of the Spanish exchange rate to decrea SC in spite of the fact that the balance Of trade amounts to $150,s20,705 in Americas favor for the first eleven months of 1917, the latest figures avail able. On November 30 the peseta, or dlnarily worth S.193, cost s.242S in 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 difference 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 Amer lca's disadvantage, although it still re- mains less than the rate in European countries.