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

Within a fortnight of the rebellion it had become evident that the nationalists would receive military aid from Germany and Italy, while the democracies refused arms to the Republic. This imbalance was increased by financial support to the nationalists, as vital in a drawn-out war as military aid. In the early days the republican government controlled the country’s 635 tons of gold, the equivalent of 715 million dollars, as backing for its peseta, while the nationalists could offer only the probability of victory as collateral for their currency.²⁴ Nevertheless, Prieto was wrong to claim on 8 August that the gold gave the Spanish government an unlimited resistance, while the financial capacity of the enemy was negligible.

The nationalists immediately looked to foreign financial institutions for help as well as to Spanish supporters. The principal backing for the conspiracy came originally from the huge resources of the former tobacco smuggler Juan March, who apparently contributed £15 million. Ex-King Alfonso’s immense generosity to the nationalist movement, giving $10 million, was only possible as a result of the vast fortune he had reputedly managed to transfer abroad. Much of the capital that had been smuggled out of Spain during the Republic, especially in the first half of the year, was soon transferred back to nationalist territory. The nationalist movement demanded the gold of private citizens, in particular wedding rings, to help pay for the war.

American and British business interests were to make a great contribution to the final nationalist victory, either through active assistance, such as that given by the oil magnate Henry Deterding, or through boycotting the Republic, disrupting its trade with legal action and delaying credits in the banking system.²⁵

Oil had now become almost as vital a commodity in war as ammunition. The US Neutrality Act of 1935 did not, however, reflect this change, thus allowing Franco to receive 3,500,000 tons of oil on credit during the course of the war, well over double the total oil imports of the Republic. The president of the Texas Oil Company was an admirer of the fascists, and on receiving news of the rising he diverted five tankers en route for Spain to the nationalist port of Tenerife, which had a large refinery. Since Texaco had been the principal supplier to the government, his decision was a severe blow to the Republic. Standard Oil of New Jersey was another supplier, though on a smaller scale. The Duchess of Atholl, one of the few British conservatives to support the Republic from the beginning, claimed that the Rio Tinto Zinc company helped finance Franco by supplying foreign exchange at over double the official rate. Later on Ford, Studebaker and General Motors supplied 12,000 trucks to the nationalists, nearly three times as many as the Axis powers, and the chemical giant, Dupont of Nemours, provided 40,000 bombs, sending them via Germany so as to circumvent the Neutrality Act.²⁶ In 1945 the under-secretary at the Spanish foreign ministry, José Maria Doussinague, admitted that ‘without American petroleum and American trucks and American credit, we could never have won the civil war’.²⁷

Shunned by the democratic powers and the international business community, the Republic could count only on the support of Mexico and the USSR. As a result, the nationalists’ warnings of an ‘international communist conspiracy’ carried some conviction, even though Soviet policy was hardly consistent. After Lenin’s death Trotsky’s policy of worldwide revolution had been based on the premise that Russian communism could not prosper so long as it was surrounded by a hostile capitalist world. The opposing Stalinist policy of ‘socialism in one country’, which triumphed in 1927, implied an abstention from involvement in revolutions abroad. The Chinese communists, for example, were sacrificed to Chiang Kai-Shek’s Kuomintang to further Russian interests, and Stalin gained recognition from the United States government in 1933 by promising not to indulge in subversive activities there.

On 25 July Giral sent a message to Stalin’s government via the Soviet ambassador in Paris requesting modern armaments and ammunition ‘of all types and in large quantities’. But the Soviet Union was fearful of the international situation and the possible consequences. This did not, however, stop the Kremlin from authorizing less controversial help, with the instruction: ‘To order NKVT [People’s Commissariat on Foreign Trade of the USSR] to sell fuel oil immediately to the Spaniards, at reduced prices, on most favourable conditions, any amount that they need.’²⁸