Churchill and Spain

The Survival of the Franco Regime, 1940–1945

Richard Wigg

• Publisher: Routledge
• Year: 2005
• eBook ISBN: 9781134237050
• Edition: 1
• Topic: History
• Subtopic: European History
• Index: History

This thoroughly researched, highly perceptive and utterly gripping study deals with an important aspect of Spanish and British history - Churchill's policy of appeasement toward the Franco regime in Spain.

Wigg demonstrates that the tolerance shown toward Spain's wartime trading permitted the rebuilding of Spanish gold reserves which helped Franco survive his (and Spain's) international ostracism between 1945 and 1950.This important book will interest scholars with an interest in contemporary European political history as well as those with a general interest in Spanish history.

1: 1940: In the hour of need

When Winston Churchill took up the offices of Prime Minister and Defence Minister in that awesome May of 1940 Spain was not among his immediate priorities. He was busy elsewhere, with the fall of France imminent and with home matters including a real prospect of invasion of Britain’s shores. To read the abundant literature available now on those overloaded and heroic days, or to study those days’ events through the flood of signals daily from him on so many aspects of the war at the Churchill Archives, is to understand that the demands on the Prime Minister’s time and energies could not be expected to make his attention to Spain anything but intermittent. This was so even when he did turn to the unavoidable strategic issues the Iberian peninsula threw up for Britain as a sea-power with an empire. Longer concentration was impossible: the demands of the war machine simply would not have permitted it him.

It was thus only in September 1940 that a considered policy by Churchill on how to handle Franco Spain appears as a personal minute in the archives.¹ He is answering Lord Halifax, still in place as Foreign Secretary in the coalition government Churchill now led, though a holdover from the previous Chamberlain administration. He was urging a measure of leniency towards the Spanish government. This concerned the British Navy’s stringent blockade against Hitler’s conquered Europe. A certain degree of trade with Spain, so long as it did not actually join the Axis camp and declare war against Britain, was a principal element of British policy at that juncture. The new Prime Minister both endorsed this approach and set his own bold stamp on how far he saw it might serve Britain’s war purposes.

‘I entirely agree with you that we should delegate authority to our embassy at Madrid to smooth the economic path and settle minor blockade points out of hand,’ Churchill wrote. But raising bigger issues he went on: ‘I would far rather we should pay our way with Spain by economic favours, and other favours, than by promises of giving up Gibraltar after we have won the war.’ The British Cabinet had just considered what steps might be taken in the face of the Spanish government’s, and the Falange’s noisy public agitation to recover the Rock for Spain that summer, but Churchill’s argument against such thoughts had prevailed. ‘I do not mind if the Spaniards go into French Morocco … I would far rather the Spaniards in Morocco than the Germans and if the French have to pay for their abject attitude it is better that they should pay in Africa to Spain than in Europe to either of the guilty powers [Germany and Italy]. Indeed I think you should let them [Spain] know that we shall be no obstacle to their Moroccan ambitions provided they preserve their neutrality in the war. Must we always wait till a disaster has occurred?’ Churchill had asked Halifax, revealing his most personal feelings after taking over in the darkest days of the war.

Gibraltar as the gateway to the Mediterranean would always excite Churchill’s interest and it is often from this perspective alone that we see him early in the war taking Spain into account. Gibraltar, and one of the Navy’s battle cruisers, HMS Hood in the harbour there, had characteristically caught his eye much earlier on. He personally minuted the First Sea Lord to get the Hood to sea on 20 July; it should join the aircraft-carrier Ark Royal to avoid the risk of ‘a surprise bombardment’² by the enemy. Churchill added urgency with the words ‘provided the Spanish situation has not further deteriorated’. Churchill’s vigilance on details for a sea-power, the product of his long career, is obvious as well as his keen political uncertainty then as to which way Franco Spain might go. The next day he was again on to the First Lord as the Hood and Ark Royal had put out to cruise observing that meanwhile the government must ‘reach definite decisions of principle and policy about Gibraltar’.

On trade as a means to entice Franco Spain not to throw in its lot with the Axis powers, and still barely emerging from the devastation of the Civil War, Churchill was only giving his impetus to a policy which had been followed ever since the Anglo-Spanish War Trade Agreement (WTA) of March 1940. The Prime Minister was content to leave the details to the Foreign Office, to Hoare after he reached Madrid in June, to the Admiralty and to that special wartime creation the Ministry of Economic Warfare (MEW). But Churchill’s endorsement was important during 1940 while the Labourite Hugh Dalton was the minister there for a policy struggle which was going on whether these concessions Halifax had sought could really be justified. Could not vital items for Spain, such as petrol and cereals, really be used as a build-up of supplies prior to joining the Axis? The detailed evidence on supplies could be read at the time either way – and often was by the rival ministers and their officials.

A consequence of Churchill’s lack of time to attend to the handling of problematic Spain, enhanced that summer and early autumn of 1940 by the Caudillo’s ambiguity and manoeuvrings, was the Prime Minister’s reliance upon a few selected individuals who enjoyed direct access to him – a rare privilege. Chief among these was Captain Alan Hillgarth, naval attaché at the British embassy in Madrid from 1939 to the autumn of 1943, but in fact much more regarding Britain’s wartime dealings with Spain. ‘I know this officer, he is very good,’ Churchill once minuted a minister on Hillgarth. It is clear the Prime Minister enjoyed, and trusted, this naval officer’s perception of Britain’s strategic interests in the western Mediterranean as well as personal knowledge of Spain. Churchill’s well-known liking for service types, and particularly perhaps those from the Royal Navy, allowed Hillgarth undoubted influence. His views and his entrée with the Spanish regime formed an essential element in the Prime Minister’s highly personalized strategic and intelligence thinking about that country. Churchill felt but rarely comfortable with Hoare’s views and sympathies. Hillgarth’s were always clear, bold and concise, just as the Prime Minister desired from his subordinates. The trusted Hillgarth could also keep a watch on Hoare.

Hillgarth had retired early from the Navy possessing independent means and, having ‘married well’ (as Churchill himself once noted to Eden), gone to live in Majorca. Bored, he decided to take the post of honorary British consul, though there must be a strong suspicion that Hillgarth appreciated the strategic position of the one-time British possession in the western Mediterranean made it interesting for intelligence purposes. Hillgarth quickly became involved when the Spanish Civil War broke out. Majorca sided with the Nationalists becoming their chief naval base and it was then that Hillgarth made his first contacts with senior Spanish naval and army commanders, soon to form the backbone of the Franco regime.

Hillgarth was deeply involved with settling the details on the spot of the Navy’s wartime blockade regarding Spain as Churchill had directed. But even more important he was to be the artificer, with the Majorcan banker and free-booting trader Juan March, of the operation mounted to bribe a number of Spanish generals to strengthen opposition to Spain’s going to war with the Axis, or, as a Foreign Office memorandum put it, to encourage ‘elements in Spain desiring to maintain neutrality’. This was, of course, direct intervention in Spain’s internal affairs at the highest level as Churchill had hinted in that personal minute to Halifax when speaking about ‘other favours’, besides the trading ones, Britain was offering Spain. Churchill approved the operation and Hillgarth regularly reported to him on how it was proceeding. As we shall see, Churchill later intervened with the Americans to ensure the Spanish generals had untrammelled access to their money. The British public funds made available for them in 1940 totalled $10 million. Today that amount might seem trivial but, at the then prevailing rate of exchange of $4 to the £1, the figure for Spain’s total exports to the UK during that year under the WTA was the exact equivalent. It was no mean sum therefore.

The second privileged figure bound up with Churchill’s conduct towards Franco Spain was the Duke of Alba, Spain’s premier nobleman, who served as Franco’s ambassador to London throughout the Second World War. Jacobo María del Pilar Carlos Manuel Fitzjames Stuart y Falcó, the 17th duke and 10th Duke of Berwick, as descendant of an illegitimate son of King James II by Arabella Churchill, had come to London in 1937 to be the Nationalist side’s unofficial representative for the duration of the Civil War. The English dukedom and an education at Beaumont School ensured Alba a high place in British society as well as in his native Spain. A big landowner and on the board of many leading companies, Alba had been Minister of Education in the last government of King Alfonso XIII. Churchill’s faiblesse for ‘Jimmy’ Alba will be seen in the many ‘re-assurances’ on Britain’s intentions towards Franco Spain which Churchill gave his ‘kinsman’ without consulting anyone else, and often to the Foreign Office’s complete ignorance. Alba was the more calculating and had indeed initially mistrusted Churchill, preferring Chamberlain’s sympathy for the Nationalists’ cause and quick recognition of their victory in 1939. Churchill and Eden (soon to become Foreign Secretary again, replacing Halifax) both owed their wartime positions to being previously firm opponents of Europe’s dictators: would they not when in power be against Franco?

But at a lunch in December 1940, the first of many between the two during the war, Churchill satisfied Alba that he now desired ‘the best and most friendly relations with Spain’. An extraordinarily warm political friendship grew up between them, especially when the pro-Axis Ramón Serrano Suñer, Franco’s brother-in-law and both Interior and Foreign Minister, was in the aggressive ascendant in Madrid. Subsequently Churchill’s pursuit of a personal policy towards Franco Spain met up with Alba’s efforts to moderate the anti-Allied propaganda of the regime and influence Franco himself. Alba eagerly conveyed any sweet words he could pick up from the British Prime Minister to his political master in Madrid. Both Churchill and Alba as aristocrats were professing monarchists. But in reality while Alba preferred to serve Franco, instead of the Spanish Pretender, Churchill initially was for a British policy favouring a restoration of the monarchy if Don Juan de Borbón had been capable of mustering an alternative to the Caudillo. As the Pretender was to prove incapable of doing this Churchill lost interest in him.

On 14 June – the day the Germans occupied Paris, and four days after Fascist Italy had entered the war – Spain sent her troops into the Tangiers International Zone in North Africa heightening tension and British worries about Gibraltar. Franco’s intentions had to be read as menacing for Britain’s strategic interests in the Mediterranean. Churchill turned to devising a line of defence if the Spanish dictator should now follow Musssolini into the Axis camp, either going to war against Britain for Gibraltar or throw in his lot with the Germans if they invaded the Iberian peninsula. The Prime Minister got on to the service chiefs and on 17 June the Admiralty was ordered to make preparations for the seizure of Spain’s Canary Islands in the Atlantic. ‘With the Canaries in British hands,’ Churchill boldly contended, it would ‘not be necessary to quit the eastern Mediterranean even with Gibraltar gone.’ This was the first of a series of military operations, envisaging at times some 50,000 men and the ships to transport them, readied on Churchill’s orders if war against Franco Spain or in Spain against the Germans or both proved to be necessary. They were kept up to date from the summer of 1940 until 1942.

The deeper significance of all these strategic initiatives coming direct from Churchill, and endorsed by the British Chiefs of Staff, lies in the proof they give of the extent of the Prime Minister’s doubts at that initial stage of the World War of Franco’s real intentions and how they might evolve. Just as the economic measures Churchill approved were to have the ultimate effect of building up the Franco regime, the Prime Minister’s preparations against an outright conflict with Franco Spain in 1940–41 came to colour all his subsequent personal expressions of ‘gratitude’ towards the dictator notwithstanding the flaws in such thinking.

The man to play Britain’s daunting hand with the third of Europe’s dictators, Gen. Francisco Franco of Spain, in the hectic days of May 1940 had to be found first, policy would come later. With France on the brink of collapse, the geostrategic balance altered radically and Spain, astride both the Mediterranean and the Atlantic, became a major factor in the war to secure Britain’s survival.

The blunt truth is that Samuel Hoare, former Foreign Secretary, was sent to Madrid as ‘ambassador on special mission’ to get rid of him. The Labour party’s condition for entering a wartime coalition government under Churchill, rejecting two principal figures in Chamberlain’s outgoing cabinet, brought things Spanish momentarily into a personal focus for the new Prime Minister. Churchill ‘parked’ Sir John Simon as Lord Chancellor, England’s chief law officer. With Hoare personal animosity was compounded by wide-ranging political differences. The Prime Minister might have struck harder had not Halifax, still Foreign Secretary, helped with considerable tact. Halifax had indeed been both the Conservative Party’s, and the King’s preference, to succeed Chamberlain. Hoare, however, commanded little support in the country and his chief backer, Beaverbrook, was about to switch allegiances dramatically and be put by Churchill in charge of aircraft production.

‘I have just been seeing Sam about Spain,’ Halifax minuted the Prime Minister on 15 May,³ pressing Churchill, five days into the new government, to see Hoare that day and so settle the matter. ‘I should personally have favoured his selection,’ Halifax went on, evidently anxious not to arouse Churchill, ‘indeed I cannot readily think of anybody else who would have anything like the many-sided equipment that the post [Madrid] demands.’ Hoare had, however, told Halifax of his keen desire to become Viceroy of India, and the Foreign Secretary in the same minute told Churchill that this wish ‘does affect his judgment both as to doing a special mission in Spain and also as to doing the embassy for, say, six months.’ Churchill ignored Hoare’s desire to go to India and a second plea as Chamberlain’s outgoing Secretary of Air that he should assist Beaverbrook. Churchill wanted a complete break for Hoare and the Madrid posting was settled.

The day after Churchill became Prime Minister Hoare had written to congratulate him. The letter⁴ is ambiguous, evidently, as to motivation: was he seeking to placate an old political foe now become all-powerful in his protestations of admiration for Churchill’s ‘energy and brilliance’ which would now have full scope in conditions of war? The letter also contains, however, a remarkable piece of self-criticism. ‘During these months I have often felt that my dull, drab qualities were better suited for other conditions,’ Hoare confessed, referring to the period from September 1939 to May 1940.

Thus Hoare was sent abroad and embarked upon what he called ‘the most difficult task of my whole career’. He was to remain always sensitive to the unflattering circumstances of his taking up the Madrid post. In his memoirs, written post-war, Hoare carefully puts all the emphasis on the strategic significance of the posting, and he quotes as the advice which led him to accept the job the words of Admiral Tom Phillips, then Deputy Chief of the Naval Staff: ‘It is essential that the Atlantic ports and the Spanish peninsula should not fall into enemy hands’. The Madrid mission, Hoare wrote, was thus ‘not a mere diplomatic post. It was real war-work of great strategic urgency in which the Chiefs of Staff and the fighting services were vitally concerned’.⁵ He was still consoling himself in 1945–46 in his memoirs that the posting ‘was not a pretext for breaking the fall of an ex minister’.

In the London of 1940 others saw things very differently, notably Alexander Cadogan, the Permanent Head of the Foreign Office, who had, too, initially preferred ‘Old Neville’ [Chamberlain] to his new master Churchill. His wartime diary entries reveal Cadogan as bitterly suspicious of Britain’s new ambassador to Madrid. ‘Dirty little dog has got the wind up and wants to get out of this country’, the head of the FO wrote on 19 May.⁶ ‘They all want to be disembarrassed of him and agreed to send him out. … As long as I see the last of Sam I don’t care what happens.’ The next day when talking to Halifax about the appointment the vituperation continued: ‘I said there was one bright spot – there were lots of Germans and Italians in Madrid and therefore a good chance of S.H. being murdered.’⁷ But Cadogan, who had opposed the assessment of the Nazi menace by Vansittart, his predecessor, and favoured up until 1939 a compromise settlement with Germany, painted an even more brutal scenario for Hoare: ‘He’ll be the Quisling of England when Germany conquers us and I am dead!’ When the Spanish government’s agrément was received Cadogan wrote in his diary that evening: ‘Thank heaven. Good riddance to v. bad rubbish.’⁸

Trade and bribes

‘What the hell can he do anyway in Spain?’ Cadogan had mused of Hoare’s mission just before Dunkirk.⁹ It fell to Roger Makins, a subordinate, to offer Britain’s new Prime Minister more level-headed Foreign Office advice and analysis of the possibilities remaining to the British government. ‘It is hoped the appointment of Sir Samuel Hoare will greatly contribute to the realization of our objective in Spain,’ Makins’ memorandum, ‘done for the Prime Minister’ and dated 21 May, had begun.¹⁰ Britain’s goal was ‘to keep Spain neutral, to support and strengthen the elements in Spain desiring to maintain neutrality, to counter and reduce German and Italian influence and to obtain greater facilities for our own propaganda.’ But Makins had to admit that Britain had ‘little concrete inducement’ to offer Franco as counterweight to Axis predomination but through trade.

Here was the exception, something which when developed became, as we shall see, the Allies’ decisive tool against the Axis’ influence in Spain. Efforts must be concentrated on expanding a War Trade Agreement, signed by Britain with the Franco regime in March 1940, Makins emphasized. Spain had been suffering from severe economic distress since the outbreak of the Civil War. Much of Hoare’s preparations in London before arriving in Madrid were taken up in examining with the Treasury the possibilities. The Board of Trade eventually listed among items the British Empire, as part of the sterling area, might supply Spain – cotton from Egypt, rubber from Malaysia, asbestos from South Africa, jute from India and asphalt from Trinidad. Wheat for Spain might additionally be diverted from supplies to European countries now occupied by Germany. Cereals, petrol, cotton and coal were identified as essential Spanish needs offering Britain leverage and they were to remain so throughout the war. But the dangers were no less clear: the Treasury held out the prospect of 100,000 tons of wheat for Spain, with the first 25,000 tons to be shipped by June. When he got to Madrid Hoare had immediately to recommend going slow on that ‘sweetener’: Germany’s military successes made it ‘more likely’ than before that Spain would ‘be forced to abandon its neutrality,’ as Britain’s new man in Madrid diplomatically put it.

Economics as a weapon of policy was not familiar territory to Britain’s professional diplomats of the era. But Makins, who had no professional experience of the Iberian peninsula, had built up a relationship with a British businessman, David Eccles, who was recruited into the Civil Service as the war approached and who later became a prominent Conservative politician. The Spanish Civil War had ended with Franco and the Nationalists resentful of the British government’s ambiguous stand, and the Foreign Office cast around desperately for anyone with an insider’s contacts to the new regime. Eccles fitted the bill: he had been chairman of the London-based company which ran the Santander–Mediterráneo Railway used by Franco to move men and materials to the battle front in Catalonia and with company headquarters in Burgos, the Nationalists’ base camp. Eccles even spoke the language. In November he was dispatched to Madrid as ‘ideas man’ to reinforce the slow-moving British embassy. He participated eagerly in the negotiations for the War Trade Agreement. Always pushing, he had established personal relations with Spain’s Foreign Minister, Col. Juan Beigbeder, and, more importantly wi...

Table of contents

• Cover Page
• Churchill and Spain
• Title Page
• Copyright Page
• Acknowledgements
• Prologue
• 1: 1940: In the hour of need
• 2: 1941: A balancing country
• 3: 1942: Ambiguous assurances
• 4: 1943 (January–October): Franco toughs it out
• 5: 1943 (November–December): The wolfram war
• 6: 1944 (January–September): Churchill intervenes I
• 7: 1944 (October–December): Churchill intervenes II
• 8: 1945 (January–July): A wringing of hands
• Epilogue: Hoare versus Churchill over Spain
• Notes
• Bibliography