Wages of Appeasement

The little fat man with the red sash read the dispatches and concluded that he had led Spain far enough along the twisting road from pro-Axis nonbelligerency to neutral unneutrality. Francisco Franco felt that now he could relax a little.

From faraway Moscow had come blunt talk about the legerdemain with the Blue Division. The Reds, Franco saw, were onto the trick which had dissolved Spain's proud contribution to the anti-Bolshevik war--by reclothing some 1,500 men as members of a new Spanish Legion in the Wehrmacht. Other blasts from Moscow spoke of oil and bread and strategic materials which Russia thought Spain was still sending Hitler. Franco could shrug; the outbursts were plainly directed at Russia's Allies, held no special meaning for Spain so long as they produced no change in London and Washington.

In London last week the people were still angry over the bombs in the Spanish oranges (TIME, Jan. 24), but the official reaction was not frightening. Anthony Eden assured the House of Commons that he had personally told Spain's Ambassador, the Duke of Alba, of the serious effect which continuing unneutral assistance to the enemy would have on Anglo-Spanish relations, now and later. Eden said that Sir Samuel Hoare in Madrid had received instructions to tell Franco the same thing: But Eden rejected a request for stronger action, saying that oral representation has worked pretty well--in some cases.

From Washington the U.S. State Department, which has insisted on maintaining shipments of oil to Spain ever since Pearl Harbor, went on the air last week with a full-dress defense of its policy toward Franco. NBC listeners to a new venture called The State Department Speaks heard high officials say that the oil goes to Spain as part of the bargaining to keep neutral countries from supplying the enemy with what the enemy wants. The Department denied that the oil seeps into Festung Europa.

After weighing the evidence, Franco decided to sign a 100-million Reichsmark credit agreement with the Nazis, ostensibly liquidating his debt to Hitler for services rendered during the Spanish Civil War, actually enabling Germany to secure fresh supplies of strategic materials. Probable first German purchase: 800 tons of precious wolfram now stored on the French border and needed for armor-piercing steel. Probable second purchase: more wolfram, stored in Spain.

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