Confidential report from Leopold H. Kerney to Joseph P. Walshe (Dublin)
(S.S.27/6) (Confidential)

SPAIN'S ATTITUDE IN EUROPEAN WAR

I enclose copy of to-day's 'Voz de España' giving the text of the declaration of Spain's strict neutrality made yesterday evening by radio and published in the Boletin Oficial of 5th September. You will notice that this affirmation of neutrality relates to the war which exists between England, France and Poland on one side and Germany on the other; it may still be an open question as to whether this strict neutrality would be affected in any way by the eventual inclusion of Italy amongst the belligerent powers.

Spain's trade with Germany must naturally be affected by the war; Spain is still in Germany's debt and this debt has been reduced by considerable exports of iron-ore and other raw materials; the Foreign Minister in Burgos recently remarked in the course of a conversation with one of my colleagues that it would be an excellent thing if exports of iron-ore to Germany became impossible because in that case they would certainly go to England and France and consequently strengthen Spain's financial position.