July 25, 1949
Secretary Acheson telephoned Senator Connally this afternoon with further reference to the Spanish loan question. The Secretary assured the Senator that there was no political objection to the loan. The Secretary said that, according to the Export-Import Bank, the difficulty was that Spain could not get dollars to repay a loan, and that what Spain wanted was cotton to manufacture into clothes for use in Spain. The Secretary explained that Spain had $30,000,000 annually to spend, and the choice was up to the Spaniards as to what they used their dollars for.
The Senator asked if the loan would be paid back right away, and the Secretary replied that commodity loans were usually paid back in eighteen months. The Secretary said that what the Export-Import Bank was trying to do was to work out something that would enable the Spaniards to get more dollars, but that under the statute the Export-Import Bank does not believe this can be done.
The Senator said they were hard pressed on the Hill about the matter. The Secretary asked which amendment was up and the Senator replied that they hadn't voted on any amendment as yet. The Secretary said that the difficulty was that if the Congress took $50,000,000 away from the rest of the countries, as a credit for Spain, Spain may or may not use it for cotton.
The Senator said that if this was the best we could do they would have to take it. The Secretary said we could not order the Bank to do it.
The Senator concluded the conversation by saying that they were having difficulty on the arms bill, and the Secretary said he wanted to have a talk with him about it - possibly Tuesday.
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