The Battle for Spain: The Spanish Civil War 1936-1939

During that spring of 1938, while the nationalist Army of Manoeuvre was overrunning Aragón, the Republic faced a growing economic crisis and low morale in the rear areas. There was distrust between political groups, fear of the SIM secret police and resentment against the authoritarian nature of Negrín’s government, acute food shortages, profiteering and defeatism. At the same time the population of Barcelona–now the capital of the Republic–suffered from the heaviest bombing raids of the war.

The republican zone lived in a spiral of hyperinflation. The cost of living had tripled in less than two years of war.¹ The greatest burden on the economy at the beginning of the war had been the militia wage bill. The rate of pay, however, was not raised from the original ten pesetas a day, despite the high level of inflation, so that by the winter of 1936 arms purchases from abroad had become by far the greatest expenditure. Spain had no arms industry, apart from small factories in the Basque country and Asturias. It was therefore unrealistic to expect metallurgical industries in Catalonia to be able to convert themselves for war production when the expertise was lacking. In fact, it was remarkable what their factories managed to improvise during the first six months of the war, when the central government, determined to take control from the CNT collectives and the Generalitat, refused to provide foreign exchange for the purchase of machinery from abroad.

All the arms which the Republic needed had to be purchased abroad, with payment in advance in gold or hard currency. From the moment it was known that the Republic’s gold reserves had been transferred to France and the Soviet Union, a form of gold fever started in Europe among governments, and above all arms dealers, who saw the chance of huge profits at little risk.

Right from the start of the conflict the republican authorities, ignorant of the arms trade, had created a seller’s market in Europe and North America by their obvious desperation. On 8 August 1936 Álvaro de Albornoz, the republican ambassador in Paris, signed a contract with the Société Éuropéenne d’Études et d’Entreprises, giving it exclusive rights ‘for the purchase in France and other countries of all products’, committing the Republic to pay a commission of 7.5 per cent for its services. Yet this company was largely owned by merchant banks (such as Worms et Cie and the Ottoman Bank), newspapers (Le Temps and Le Matin) and major industrialists such as Schneider-Creusot, all of whom supported General Franco.

Republican purchasers found themselves facing a barrier of blackmail, when government ministers and senior officials demanded huge bribes, ranging from $25,000 to $275,000 for their signature on export licences and other documents. Sometimes they took the money and then blocked the shipment later.² Because of the non-intervention policy, the Republic was entirely vulnerable to such tricks. And often when the weapons–paid for in advance–finally arrived, the crates contained inferior or even unserviceable weaponry. The necessity of obtaining arms wherever they were available meant equipping the People’s Army with a wide variety of calibres involving many different types of ammunition. A very large proportion, perhaps even half, of the weapons purchased never arrived, either because of fraud, or the blockade, with torpedoings at sea and the bombing of ports.

Spanish governments had purchased weapons from Germany since well before the arrival of the Nazis in power. The colonial army in Morocco had demanded mustard gas to use against the Riffian tribes, who later became their most effective auxiliaries. Yet during the civil war the Republic purchased arms from Nazi Germany, General Franco’s most important ally. Recent research³ has now shown that what was long suspected is true: Colonel-General Hermann Göring, Minister President of Prussia and commander-in-chief of the Luftwaffe, was selling weapons to the Republic while his own men were fighting for Franco.