Many people have been puzzled at the attitude of the British Government, the capitalist Press and the ruling class generally towards the civil war in Spain. It was natural that their class prejudices and their associations with Spanish Conservatives and the Catholic Church would make them sympathise with General Franco’s revolt and hope for its success. Yet it might have been expected that they would quickly see the force of the argument, put forward by the Naval correspondent of a Conservative newspaper, that from a strategic point of view the interests of the Empire are bound up with the defeat of Franco and his German-Italian backers. This correspondent pointed out that German-Italian dominance of Spain and Spanish Morocco, including the approaches to Gibraltar and the control of the Balearic Islands in the western Mediterranean, unquestionably threatens the British hold on the Mediterranean and seriously, hampers communications with East Africa, India and beyond. Mussolini’s military and naval experts have not troubled to keep secret the intention of turning the sea into an Italian lake; and their British counterparts have been compelled to recognise that the threat is not an idle one. The handling of the Abyssinian affair showed that the British Cabinet were not prepared at that time to risk an open clash with the Italian forces. What, then, is the explanation of the Government’s behaviour, apparently so little in keeping with their class and imperial interests ? The attempt to provide an answer must take into account many divergent factors.
Willing But Not Yet Ready For War
First, there is the aspect, referred to above, that the Government was not ready for a possible war with Italy. That was an important factor in 1935 when Italy invaded Abyssinia. It is less important now that British naval and air rearmament has got well under way. It will be noticed that the recent announcements about the building of new or reconditioning of old warships and about the completion of more and more up-to- date squadrons of aeroplanes coincide with a noticeably more aggressive policy towards encroachments on British capitalist interests in the Mediterranean. Where before there was comparative reticence we now have the Foreign Secretary, Mr. Eden, declaring in unmistakable terms that British disinterestedness in the Spanish conflict does not mean indifference where British interests are concerned “ on the land or the sea frontiers of Spain or the trade routes that pass her by ” (Report of speech in Parliament, The Times, July 20th, 1937). He and the Prime Minister issued a plain warning to German and Italian capitalists that the Mediterranean is for British capitalism “a main arterial route, and we intend to maintain our place on it.”
Mr. Eden further warned Italy that : —
It has always been, and it is to-day, a major British interest that no great Power should establish itself on the Eastern shore of the Red Sea.
That the German and Italian threat is a serious one is shown by the information about big guns overlooking Gibraltar erected in the past six months by Franco’s foreign friends. Even the most loyal of Franco’s Tory supporters began to choke at the idea of “The Rock” being dominated by German or Italian guns and, with unconscious humour, they now grow more enthusiastic for strong action to prevent the intervention of foreigners in Spain.
It escapes their notice that to a patriotic Spaniard the most outrageous of all intervention of foreigners on Spanish soil is the existence of this British fortress at Gibraltar.
Mr. Winston Churchill made a characteristic statement. Speaking at Wanstead on July 4th (Manchester Guardian, July 5th) he regretted Mussolini’s recent policy and said: —
If I had been an Italian I should have been on Mussolini’s side fifteen years ago when he rescued his country from the horrible fate of sinking into violent Communism. All the more do I regret some of the recent utterings of Signor Mussolini.Happily, Mr. Churchill continued, the power and preponderance of the British navy is growing rapidly. It already far exceeds the preponderance we possessed over other European Powers at the outbreak of the Great War.
Spanish Mineral Wealth An Issue
Then, again, Spain for the rival powers is not only the arena of a conflict about democracy and dictatorship, but also and more importantly a country of great mineral wealth. The facts are well known. Frank C. Hanighen summarises them in an article in the New Statesman (April 24th, 1937): —
Spain constitutes a far richer preserve of the basic elements which nourish industry than either Ethiopia or the former German colonies. Iron, the principal staple in munitions making, which both Germany and Italy lack, exists in abundance near Oviedo, near Vigo, and in the beleaguered Basque provinces. The best copper mines in Europe lie in Huelva province. Not far from the mercury of Almaden, the famous Pefiarroya mine produces high-grade lead. Other essential minerals—coal, tin, tungsten, silver, molybdenum, salt, phosphates, pyrites, graphite and zinc—are scattered throughout the peninsula and, across the straits of Gibraltar, Spanish Morocco contains iron, lead and manganese. Under monarchy and republic, foreign interests and, to a lesser extent, Spanish capital developed only a part of these resources. Accordingly, when the republic faced serious civil strife, it was natural that the two most predatory Powers in Europe should look hungrily towards Spain.
Mr. Hanighen. shows how Germany began organising the shipment of iron ore from Spain in 1934, but for a considerable period the trade was interrupted owing to Germany’s financial difficulties. Then, in 1936, by arrangement with the rebels, shipment was resumed on the basis of exchanging ore for armaments. He quotes Edgar Mowrer, correspondent in Spain of the Chicago Daily News, as saying on December 22nd, 1936: “ An entire fleet of ships is engaged in bringing arms to Spain, returning loaded with iron ore for Germany,” and adds his own opinion that “it is not too much to say that the German adventure in Spain saved the German re-armament programme.” He contends that before the revolt occurred in July, 1936, the iron ore situation in Germany had become serious: “Britain had started to compete for Swedish ore, one of Germany’s best sources. The French Socialists, in power in France, had been talking of an embargo on Lorraine ores to Germany. Spanish iron ore for the past year had been unavailable because Spanish exporters could not obtain German import licences as a result of the German currency shortage.”
Here we have Germany’s interest. Italy was likewise concerned to gain control of the tungsten and vanadium deposits, the iron, lead, copper and sulphur near Cartagena, and the mercury mines of Almaden, north of Cordoba.
It is plain enough why German aeroplanes should bomb Guernica, in the north, on the way to Bilbao and Oviedo, and why Italian troops should be engaged in trying to capture Almaden in the south'. Indeed, Hitler and Mussolini have lately been quite candid about it.
Addressing a Nazi gathering at Wurzburg on June 27th, 1937 (News Chronicle, June 28th), Hitler said:
Germany needs ore. That is why we want a Nationalist Government in Spain—to be able to buy Spanish ore.
and Mussolini, in an article in Popolo d'Italia on June 26th, 1937 (The Times, June 28th), wrote:
Italy has not been neutral, but has fought, and victory will also be hers.
But while the policy of Italy and Germany has been easy to understand and has been complicated only by possible divergences of interest between the two powers, the situation, from the standpoint of British capitalism, has been more complex.
The private interests of British shareholders in companies working mines in Spain have had to be considered and these have not necessarily coincided with the interests of the British imperial exploiters as a whole.
The Choice for British Capitalists
First consider the difficulties of the situation facing the big and wealthy companies operating in Spain : the Rio Tinto Co., Ltd., which owns great copper and sulphur mines in the province of Huelva; the £2,000,000 Orconera Iron Ore Co., “in which the Consett Company and Guest Keen Baldwins Iron & Steel Co. hold investments of a nominal value of £800,000 each ” (Daily Express, July 20th, 1937); the Barcelona Traction Co. and many others.
The aim of the directors in such concerns is naturally that of protecting their properties and maintaining profit-earning capacities. Beyond that they would incline to hope for a Franco victory as more likely to give a “strong government," which would “stand no nonsense from trade unions,” particularly when they read the declarations of the aims of some of the Popular Front Government’s supporters. How, in fact, have British capitalist interests fared?
The Anglo-Spanish Construction Co., which owns and operates the Santander-Mediterraneo Railway, say that everything has been satisfactory since General Franco took control of the area (The Times, July 9th, 1937).
From Government territory the Barcelona Traction Light & Power Co. tell a different story in a statement to shareholders (The Times, June 26th, 1937).
The company found so many difficulties in its relationships with the Workers' Committees that it withdrew its staff in September, 1936.
They state that since the date of the issue of the two circulars last year the general conditions in Spain have grown steadily worse and have, in fact, developed in such a way that it has been found impossible to obtain any reliable information as to the true position of the affairs of the enterprise in that country in which the Barcelona company is interested. The seizure effected by the Workers’ Committee in Barcelona covers all the properties, funds, and banking accounts of the enterprise.Representations made through the British Foreign Office against the usurpation of the interests of the enterprise, and protests from time to time by the British Consul-General in Barcelona to the Catalonian Government, have produced no satisfactory results. The funds and cash have been removed from the banking accounts of the enterprise and appropriated by the Workers’ Committee. [Times, June 26th, 1937.)
While firms in Franco territory have had to submit to financial losses and such inconveniences as the murder of hundreds of their workers (as happened with the Rio Tinto Co.), it is not to be wondered at if they prefer that to the seizure of their property and funds by Workers’ Committees.
It is therefore hardly surprising that Rio Tinto shares dropped from £22 to £13 following the electoral victory of the Popular Front Government in February, 1936, and rose sharply after the rebels captured Huelva in August, 1936 (New Statesman, April 24th).
About the Orconera Iron Ore Co. and its mines in Bilbao province the position is somewhat obscure. The Times City editor says (July 19th, 1937) that until about a month earlier there had been no interruption of shipments from these mines. Then there was a stoppage during the fighting round Bilbao, which resulted in Franco’s capture of that town. Franco then gave a verbal promise that ore supplies to Britain would not be interfered with. It was, however, reported from Berlin (News Chronicle, July 20th, 1937) that a German treaty with Franco provides that Germany’s much-needed iron ore for re-armament will be supplied from the Basque mines.
This may mean that Franco is acting against the interests of the British companies or it may mean that an agreement has been arrived at between the interested German, British and Spanish companies. The article in the New Statesman, quoted above, gives support to the latter view, although it deals with other companies than the Orconera Co.
While Germany and Italy quite openly fight battles for raw materials, international capital takes a stand which can only be construed as co-operation with these Powers. In the Riff, for instance, British and French mines receive no payments for the ore which is being sent to Germany (all payments, as it has been shown, are applied to Franco’s armament debt). Yet these companies show an odd diffidence about the matter. Not a single protest has been filed by these companies or their governments. On the contrary, the financial elements in London and Paris representative of these companies are known to be strongly pro- Franco.Consider the extraordinary case of the Rio Tinto mines . . .According to the Manchester Guardian, the output of Rio Tinto is being requisitioned and sold to Germany, at a price of 42 pesestas to the pound, whereas the current rate is between 80 and 90 per pound. Has an international capitalist “understanding” been reached with Franco and his Fascist backers ?“. . . . Why should not these British and French interests find in a Franco victory a solution of difficulties which have prevented them from being impartially (and prosperously) international ? Currency restrictions and the consequent inability of Germany and Italy to buy freely have kept many companies from profiting from the German and Italian armament booms. But with Franco in power, British and French capital might flow into a newly-organised Bank of Spain, Germany and Italy might borrow from this institution to pay for raw materials, and dividends in Penarroya, Almaden and the foreign companies in the Riff would be amply assured.”
What exactly these various British companies may be doing behind the scenes it is impossible to know, but it is certainly likely that they would seek some such solution as the one suggested by Mr. Hanighen. It must also be noticed that the controllers of these companies are exceedingly influential in British political as well as financial circles and would be able to exert great pressure on Government policy in a direction which would help them strike a good bargain with Franco and Franco’s friends.
There remains to be considered still one more aspect of the problem, that is the dependence of British re-armament on metals from Spain and elsewhere.
Ore For British Armaments
While British capitalists would have no objection whatever to making profit by selling materials to Germany or Italy for their armaments, the British Government, acting for the capitalists as a whole, cannot be indifferent to a stoppage of supplies needed for British arms. Already there is an acute shortage of steel and the loss of well over a million tons a year of Spanish ore (which cannot easily be replaced by poorer-quality ores from English or other mines) would be a serious matter for British capitalism. The Times City editor (July 19th, 1937) summarises the problem as follows (it will be noticed that, as regards Swedish ore, this statement rather conflicts with that made by Mr. Hanighen): —
If imports from Spain were to be cut off through ore being diverted to Germany or for any other reason, the task of making good the deficiency might present serious difficulties. Large deposits exist, it is true, in many parts of the world, but owing to the higher level of freight rates the cost of shipping ore from distant countries like India and Australia is apt to prove prohibitive. Of countries near at hand Sweden has probably the richest deposits, but exports are limited by the Swedish Government to about 10,000,000 tons annually, the bulk of which goes to Germany under contracts that have still several years to run. Except through a direct agreement with the Swedish Government, the scope for expanding supplies from this source is probably limited. In the first half of the current year imports from Algeria, Tunis, and especially Norway, were all higher, and should Germany contrive to satisfy a larger proportion of her requirements in Spain there is a possibility that still larger supplies in these countries would be available to Britain. Meanwhile, as the Import Duties Advisory Committee pointed out in its report, events are stimulating a movement towards the proportionately larger use of low-grade native ores, deposits of which, distributed through Lincolnshire, Oxfordshire, and Northamptonshire, are estimated at not less than 3,000,000,000 tons, or sufficient for an annual output of 10,000,000 tons of steel for 100 years. Substitution of native low-grade ores for foreign ores with high metallic content could not, however, be effected wholesale without considerable modification of existing plant and, therefore, offers no immediate solution to the problem of the scarcity.
How the British capitalists try to solve their problems in Spain is, of course, their own affair, but it is necessary for Socialists to try to understand the main lines of their policy, if only in order to combat the notion, increasingly prevalent in Labour circles, that British capitalism can be trusted to pursue a peaceful, idealistic foreign policy free from the violent and sordid motives which underly the policies of the dictators.
British Government policy at the present time probably runs on the following lines: —
Determination to resist German and Italian control of Spanish territory. A desire to see a Spanish Government ultimately strong enough in armed force and popular support to prevent this. A desire not to see either side in the civil war overwhelmingly victorious, since such a Government would feel less dependent on British capital and British support. And a willingness—on terms—to do a deal with either side in the struggle, the terms to include safety for British investments and guarantees for the continued supply of ore.
Edgar Hardcastle
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