Evening star., 1944-10-12
Spain S Economy Hit
AsU. 5. Stops Buying
Strategic Materials
BY the Associated Press,

py tnS AtSoclate0 PreSs,
The Franco regime in Spain has
been placed in a difficult position
with regard to its financial rela-
lions with the United States as a
result Of this country's stoppage OF
its "preclusive" buying program, 1t
was learned today.
Until recently the American Gov
srnment had been purchasing stra-
tegic materials in both Spain and
Portugal In order to keep them out
OF the hands OF the Germans. Now
simultaneous with the occupation
OF France by Allied forces which has
the result Of isolating the Iberian
peninsula from Germany - this
policy has been ended.
Portugal Is said to have accumu-
lated a substantial dollar balance
and to be in such a good position
that she will be able to make salts
factory adjustments to the loss of
income from preclusive buying.
Situation i'm Spain.
The situation, as it applies to
Spain, is described in this manner:
Last April the United States be-
gan to stop preclusive buying by
cutting off wolfram purchases, but
continued preclusive buying of
hides, textiles, olive oil and stron-
tlum sulfate (used for tipping tracer
oullets) up to about last week.
Now Julian Harrington, head OF
the United States Commercial
Corp. in Spain, has been assigned
to Brussels as counselor of Embassy
and the once busy establishment
has been reduced to clerical staff
which is closing the books.
The British are continuing to buv
" per cent of their total iron ore
imports in Spain and are getting
other supplies which they badly
need.
The United States had such little
need for what it bought in Spain
that when Franco once imposed an
import tax on wolfram this coun-
try'S purchases of that steel-harden-
ing ore was simply stock piled in
side Spain.
l00.000,000 Outlay in Spain.
In the course of preclusive buying,
according to the Foreign Economic
Administration, the United States
spent more than 100000, 900 in
Spain. Prices paid were so high
that some officials said this country
actually got about $4,000, 900 worth |
of material. However, the objective
was not to acquire tungsten ore
end the other materials but to pre-
vent the Germans from ACQUIRING
them.
In addition to the money spent by
the United States alone, approxi-
mately $60,0O000O was spent by
other Allies during the 80 months
chat preclusive buying was carried
on in Spain.
Meanwhile, the Spanish were
trading with the Germans on a
barter basis. AS result of the Nazi
loss OF France, the Spaniards not
only lost their extra income sources
from the United States due to the
closing down of economic warfare in
Spain, but they also have lost their
German sources for badly needed
materials.
Exportable Stock Small.
More or less normal trade rela-
lions between the United States and
spain are continuing. But these are
not in Spain's favor. Frances coun-
try ordinarily has exported brandies.
wines, olives, olive oil and cork to
the United States. The dollar vol
ume of these Is much smaller than
the income received from American
preclusive buying activities.
One American official, discussing
the prospects of straitened economic
circumstances for the Franco gov
ernment, said this country would
like to restore its trade position In
both Spain and Portugal but that
Spain simply did not have a great
volume of exportable goods for us.
The Spaniards have been buying
rather substantially in this country
though by no means all they wanted
to buy. Now that they have a
prospective shortage of dollars they
apparently would be able to con-
tinue to meet their needs only by
obtaining an American loan. Diplo-
matte officials said that if loan
were asked they seriously doubted
1t would be approved.