Rio Tinto Company, 1939-1954

The Cost of Francoist Economic Policies to a British Firm: Rio Tinto Company, 1939-1954

Antonio G6mez-Mendoza • UniversidadComplutense (Madrid)

The clashof interestsbetween the Spanishand Allied Governments throughoutthe 1940screated an adverseenvironment for the aspirationsof the Rio Tinto Company.Indeed, the Britishmining company was unableto improveon the negativeresults obtained between 1931 and 1939.I will show in mypaper that the Francoist drive towards economic self-suffiency led to the impositionof policieswhich curtailed receipts and inflatedproduction costs. To someextent, these policies were deliberatedly implemented to squeezethe Companyby bringingdown its profits in the hope of nationalizingthe Company'sassets. Facing a heavyfinancial penalty, the Londonmanagers resortedto the sale of the minesin an attemptto reallocatefunds to more profitableinvestments. This strategywas frustratedby the decisionof the Britishgovernment. It opposedthe saleon accountof the high propaganda valueof the Mines duringWorld War II. Confrontingthe officialveto from the Britishgovernment and the hostileattitude of the Francoregime, RTC wasleft to take stepsto make the mostof their ageingplant. Furthermore, little hopecould be laid on the recoveryof externalmarkets for the Rio Tinto pyritesin the faceof strongcompetition from nativesulphur. This paperis dividedinto three sections.I will first outlinethe main industrialand commercialpolicies implemented by the Francoistgovernment duringthe 1940s.In the secondsection, I will discussthe responseof the Rio Tinto Company.In the final section,an attemptwill be madeto assessthe economiccost of thesepolicies for the miningcompany.

Industrial and Commercial Policies

At the endof the SpanishCivil War, theFranco regime wasted no time in lettingRTC knowabout their intentionswith regardto the futureof the miningfirm. An embargowas almost immediately lifted uponits ore exports

lI gratefullyacknowledge theuseful comments made by Prof. S. Tolliday and the audience atthe PasadenaConference. I would like to thank Mrs J. Loadman, archivist of RTZ, the staff of the PRO andMrs J. Allen of RTM for their assistance.I must deplore however the lackof financial supportfrom my academicinstitution.

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to all countries(other than Germany and Italy) [3].This decision was not only a deliberateattempt to pushup the pricesof pyritesin worldmarkets but also to assessthe supporton whichthe RTC couldcount from the ForeignOffice. The embargobrought the Company'sbusiness to a standstill.The directors arguedthat the withholdingof exportpermits was of an "expropriatorynature which if allowed to continuemust result in the total stoppageof all operations"[18]. The British ambassadorin Madrid protested the "discriminatorynature" of the embargoand askedfor its immediateremoval [16].A Companydeputation to Spainwas able to assessthat the ultimategoal of the governmentwas to nationalizethe Rio Tinto Mines [2]. RTC wasable nonethelessto reacha compromisewith Franco. It wasestablished that export earningswould be carefullysupervised through the submissionof sales contracts to the authorities2. The settlement was a serious breach of RTC's businesscode as it meantthe disclosureof confidentialinformation on prices and on customers. The six month crisiswhich placedRTC on the verge of collapse perfectlysummarized the relationsthat emergedbetween the Francoregime andthe miningCompany. Over the years1939/54, the SpanishGovernment adopteda numberof measuresin its questto nationalizeRio Tinto. However, this processmust be analysedagainst a doublebackground. On the one hand, the drivetowards economic self-sufficiency announced by Francoin 1939was a major reasonto bring the Mines under domesticcontrol. On the other, ownershipof Rio Tinto was connectedwith a long traditionof economic nationalismin Spanishlife. By the turn of the century,the expropriationof raw materialsunder foreignownership was alreadyviewed as a desirable objective.This ideologyreceived a strongboost in the 1920sduring General Primo de Rivera'sdictatorship, precisely at a time whenthe Companywas payingfantastic dividends to its shareholders.Discontent about Rio Tinto stemmedfrom the specialproperty rights were granted to the Companywhen it wasfounded in 1873.In contrastto otherforeign mining companies which operatedin Spain,RTC wasin possessionof the full domainover the land and mineral resourcesin Riotinto. To the hardlinersof the regime,the 1868 Mining Law whichwas passedunder the First Republic,led to a loss of sovereigntyover a tractof Spanishterritory. In thisrespect, they liked to draw a comparisonbetween Riotinto and the Rock of Gibraltarafter the Treatyof Utrecht. Thus, the Rio Tinto Mines were frequently describedas an "economicGibraltar" by seniorofficials of the Government.A clearexample of thisstate of mindwas provided by membersof a deputationto Berlin for discussionsof the termsfor Spain'sentry into the SecondWorld War. The Germanclaim on Englishand French owned firms in Spainwas countered on the groundsthat

2Fora detailedaccount ofthe modus vivendi agreed between the Spanish Ministry of Industry and RTC, see my forthcomingbook on the saleof the Rio Tinto Mines. 356

At a time when Spainwas preparing to unfurl her flag and in the nameof her honour,to regainthat which was lost, she must upholdher claimto the ownershipof the Rio Tinto Company, of whichshe had beenrobbed [13].

A highlysymbolic value was therefore placed by the Francoregime on the recoveryof Rio Tinto, on both economicand politicalgrounds. To this end, the SpanishGovernment was free to follow a twofold strategy.The Companycould be forced,on the one hand,to stopoperations. The Mines would then be expropriatedon applicationof the 1938 Mining Law. Any protest from Allied governmentswould be silencedby arguingthat the stoppagewas contraryto Spanishnational interests. On the other hand, mountingpressure could be exertedupon RTC to inducethe directorsto sell the Mines under favourable conditions.

EconomicPolicy as a Weapon against RTC

The dramaticcourse of internationalpolitics and the growingeconomic stringencysuffered by Spainsaved RTC from confiscationon two occasions: in 1939and againin 1944.Thereupon the regimeturned to economicpolicy as a wayto suffocatethe Rio Tinto Mines.By resortingto a lessprovocative approach,the governmentfulfilled two additionalgoals. First, copper,pyrites and sulphurwere suppliedat low costafter miningoperations were resumed at Rio Tinto. Furthermore,the outputof the Mines wasexchanged for large sumsin foreigncurrency which were indispensableto importcorn, fertilizers and oil. Second,the Francoistadministration benefitted from RTC's standing in the l?mancialmarkets to obtain advantageousdeals in their bilateral negotiationswith England or the UnitedStates. Thus Carceller, as Minister of Industry,applied to RTC the same'carrot and stick'policies which were usedby the Britishgovernment to preventSpain from joining the Axispowers [8, p. 79]. One suchepisode took placein 1941/42when the ministermade the approvalof highercopper prices for the homemarket conditional upon thegranting of exportlicences by the Roosevelt administration. RTC wasalso askedto increaseits copperoutput by a fairlyconsiderable amount. To meet this latter requirement,equipment had to be importedfrom eitherEngland or the United States.However, British goodwill to assistRTC facedstrong oppositionfrom the American Office of the Lend-Lease Administration. After muchhesitation, an agreementwas finally concluded in early 1942between Churchilland Rooseveltto "supplythe RTC from the United Kingdom, equipmentthat they will need to complywith the wishesof the Spanish Government"[5]. It meanta flagranttransgression of the recentlyapproved Anglo-Americanpolicy with regardto the Francoregime. The disclosureof this agreementcreated a great scandalin the press.However, it did not shatterthe support given to RTC bythe British Government 3.

3Furtherdetails about this episode are given in chapter2 of myforthcoming book. 357

To keepthe Rio Tinto Mines underpressure, the SpanishGovernment had at its disposala wholerange of economicchecks derived from its general industrialand commercialpolicy. However, a smallnumber of measureswere specificallydesigned for the purpose. Industrialpolicy inflicted a heavypenalty upon the operationof the Rio Tinto Mines. Its influenceshould be assessedfrom a double perspective. Firstly,its strivingfor self-sufficiencyled to the obligationon the part of RTC to sell its copperoutput in the home market. RTC thus failed to take advantageof the existingdifferential between the LondonMetal Exchange (LME) quotationfor copperand the Spanishprice. Secondly, RTC lostthe monopolyreturns which it had hithertoextracted as the solecopper producer in Spain. In the marketingof pyrites,RTC had traditionallyacted as a dominantfirm pressingfor highprices through the cartelwhich was under its control.In the fight to curban inflationrate of 11.5% p.a. between1940 and 1954, the Spanishgovernment departed from market mechanisms.Drastic price controlswere implemented.Requests for priceincreases by RTC were examinedby the Ministry of Industryafter consultationwith a number of governmentalagencies. Although this complex system gave rise to widespread corruptionamong senior officials, RTC gainedlittle advantangefrom it. To someextent, the managersfailed to graspthe profoundchanges which were takingplace in the way businesswas conducted under the new regime.They badlymiscalculated the reactionsof their newinterlocutors who viewedtheir approach as arrogant. By their dealingsthey generated an even more antagonisticattitude towardsRio Tinto's foreign ownership.The regime embarkedupon a policyof promotingstate controlled firms to counterRTC's dominantposition in the homemarket. In the late 1940s,an effort wasalso madeto challengeRTC's supremacyin the Europeanpyrites cartel. Commercialpolicy also exerted a negativeimpact upon RTC's interests. While suchpolicies were not a deliberateattempt to damagethe Company, their side effectswere certainlya major sourceof concernto RTC. Trade regulationsstemmed from the seriousshortage of foreigncurrency which was sufferedby the Spanisheconomy throughout the 1940s.They affectedRTC's businessin a doubleway. Firstly, the Companywas persistentlydenied the appropriatelicences for the importationof spareparts and coal.Secondly, the firm wasforced to surrenderall its foreigncurrency earned on its exportsales at the officialrate of exchangeof the peseta.This rate greatlyovervalued the freerate 4. The exchangedifferential was equivalent to theimposition of a tax on exportsales since it considerablyreduced the pesetavalue obtained by the seller.Moreover, the sterlingrequired to coversocial overheads at the London headquarterswas purchased at yet another rate. However, currency regulationswould have prevented the repatriationof capitalgains to England evenif the Rio Tinto Mines had beenprofitable in the 1940s. Finally,RTC's variablecosts were badlyhit by a long successionof socialinitiatives intended to improvethe welfareof the workerswho suffered

'UFheaverage official rate was 38.3 ptas to the pound for the years 1940/54 while it reachedan averagevalue of 104.7ptas in the free market of Tangiers. 358

the impactof raginginflation. Although wage increases were seldomgranted to avoid boostingprice increases,indirect measureswere put into effect: Sunday pay, social allowances,working hours, special regulationsfor undergroundwork and cooperative stores. The Company was denied permissionto reduceits workforcein spiteof highexcess capacity. In sum, the combined effects of industrial, commercial and labor policiesjeopardized the normal operationof the Rio Tinto Mines. Their impactwas further boosted by the dislocationof the entireeconomy due to the destructionsuffered in the CivilWar. Shortagesof coaland power brought the smelter to a standstill on several occasions in the course of the 1940s and disruptedthe internaltransportation system. The lack of spareparts hindered repairsat the Company'sworkshops. The impossibilityof importingnew equipmentto melt oreswith low coppercontent brought about decreasing returns.As a result,the averagecost per ton of orewas multiplied by a factor of 5.8 between1940 and 1954,though in real terms,the increaseamounted to only27 per cent.The largestcost increase took placebetween 1947 and 1953 (64per cent) after the Government had agreed to substantiallyraise wages s. High operatingcosts responded to a combinationof declininglabour productivityand the emergenceof diseconomiesof scale as Rio Tinto operatedwell belowfull capacity.Between 1938 and 1944,the volumeof ore extractedfrom the Rio Tinto Mines was cut from 1,116,000Tons to 391,000 Tons or a mere 35 per cent of its former level.By 1952,output was still 20 per cent under the prewar level. The high dividendspaid until 1929 were followedby the paymentof a mere 2.2 per cent on preferentialshares for statutoryreasons between 1931 and 1947.As Harveyhas shown, the "financial standingof RTC was only maintainedby the high dividendspaid by the NorthernRhodesian copper companies" [7, pp. 296-7]. It would be misleading,however, to put all the blame for RTC's decliningproductivity on the impact of Francoisteconomic policies. At pithead andat theHuelva seaport, the plant was rendered obsolete after a longperiod of low investmentwhich began in 1931.In the 1930s,the investmentclimate had been unfavourabledue to political instabilityand threats to foreign interests.In the mid-1940s,RTC's GeneralManager recognised that a "bad guess"was made in the 30s when it was decidedthat "no moneyshould be spentin modernisingplant and equipment and installing labour-saving devices" [17]. Of course,neither the Boardnor the managerscould have foreseen the dramaticevents which happened after 1936both in Spainand elsewhere.But they certaiulyhad enoughelements of judgementto predict the declining coppercontent of the oresand the exhaustionof the Riotintoreserves.

•Thisis a weightedaverage cost of extractedore in theopencast and underground mines includingthe costof overburden[7, p. 347]. 359

The Responseof RTC

How did the Londonmanagement react to the antagonismshown by the Francoistregime? While at pitheaddrastic savings were introducedin all lines of production,the Board discussedfour alternatives.All of them had importantpros and consthat calledfor a closeexamination. As sale earningsfailed to covervariable costs, economic rationality urged a complete stoppageof mining activities,at least until business expectationshad improved.However, the directorswere rightto fear that this movecould lead to a lossof controlover Riotinto. Indeed, current legislation contemplatedthe possibilityof leaseholdersseeing their propertyrights cancelledwhenever national interests were at stake.The regimehad invested itselfwith the rightto expropriateany mining company which did not comply with the termsof the law. It had evenattempted in 1943to supressRTC's specialrights over the mineral depositsof Riotinto by makingthe British companycomparable to any other concessionholder. The attempt was frustratedonly after the British Government had strongly pleaded against such a step. As a secondalternative, the RTC board discussedthe possibilityof leasingthe Mines to the SpanishGovernment [12]. This solutionwas also dismissedfor itsinherent dangers. The directorsfeared that oncecontrol over the Rio Tinto Mines had been transferredto Spanishhands, the authorities might have felt little prone to return them back to their British owners. Furthermore, it would have been difficult to prevent the authoritiesfrom supplyingGermany with the productsof the Mines. After the two previousoptions had been discarded, the boarddeclared itselfstrongly in favourof the disposalof the Mines.The moneyfrom the sale couldthen be pumpedinto the profitableRhodesJan copper belt where the Companyhad been investing large sums of capitalsince the early1930s [7, p. 223].In thisrespect, the possibilityof creatinga subsidiarywhich would have grantedSpanish capital access to the Rio Tinto Mines was examinedby the directors.However, mining laws preventedthe adoptionof this solution. Indeed,the 1944law establishedthat foreigncapital could only own a 25 per 100holding in anymining enterprise. In addition,the chairmanand 2/3 of the directorshad to be Spanishnationals. Confronted with the certaintyof losing the control of the Mines, the Board resorted to the transfer of their entire assetsin Spain.The operationwas attempted at three differenttimes in the period 1940/54.Sir AucklandGeddes, the actingChairman of RTC, argued m 1943 that the "mostprofitable course from the Company'sand from the shareholders'point of viewwould be to disposeof the Mines"[15]. It is clear that the Board had realizedthat the opportunitycost of failing to sell the Mines was huge, even if profits had recoveredtheir prewar level6. Negotiationswere startedwith a viewto the saleof the company'sproperty in Spain.They lastedfor 11 yearsas they were frequentlyinterrupted by

6Itwas estimated that nearly 30 years of normalprofits were necessary tobeat the L 5mnet pricewhich could have been realizedfrom the saleof the Mines in 1944. 360

eventsof a non economicnature. One suchepisode happened in 1944. The Companyhad beeninvolved in a longnegotiation with a bankingsyndicate. The settlementwas finally frustrated after both the ForeignOffice and the Treasury vetoed the sale. However, other departmentsin the British Governmenthad initiallygiven their approval.From the point of view of war policy,no objectionswere raisedas the Englishchemical industry could be suppliedby pyritesfrom Sicilyor Cyprus.The Bankof Englandalso favoured the operation.It wouldhave meant the returnof substantialsterling balances currentlyin the handsof Spain.In spiteof thesepositive aspects, strong views were still voicedagainst the sale.Sir J. Anderson,the British Chancellor, emphasizedthat RTC was"a channelof commercialcommunication between [England]and Spain" [10]. Senior membersof the Foreign Office staff expressedtheir discontent in termsof a "lossof nationalprestige". Their views were sharedat a higherlevel by Sir AlexanderCadogan, Sir AnthonyEden and the ambassadorto Spain,Sir SamuelHoare. All three stressedthe fact that the "disappearanceof the mostimportant company in Spainmight prove a severeblow to our prestige". The British Government's veto lasted for several months. When RTC resumed negotiationswith Spanishindustrial interests, the situationwas markedlydifferent from whatit hadbeen. On the one hand,Riotinto did not recoverits strategicposition until Allied ambassadorswere withdrawnfrom Spainto put into effectthe 1946United Nations decision to isolatethe Franco regime. On the other hand, Spain again underwentan acute shortageof foreigncurrency which hindered any commercial transactions involving a vast sum of sterling.It was now the turn of the Spanishauthorities to reject all dealingsconcerning a possibletransfer of the Rio Tinto Mines.They resorted to economicpolicy as a far cheaperand more efficient way to complywith the country'srequirements in copperand sulphur. A cost-benefitanalysis of nationalizationwas most probably not undertakenby Franco's ministers in 1944[14, pp. 298-301]. By postponingthe purchaseof the Mines until 1954,the Governmentproved that the costof nationalizingRio Tinto on purelypolitical grounds could hardly be balanced againstits potentialadvantages. It would have been indeed difficult to justify the allocationof severalmillion pounds to obtaincontrol over Rio Tinto when the economyfaced a majorscarcity in foodand raw materials.Moreover, the purchaseof the Mines mighthave led to a declinein miningefficiency. It is doubtfulwhether Spain could have matched British know-how in largescale open-castmining. Spanish businessmen did not havethe sameexpertise for the marketingof pyritesat a crucialtime. British commercial experience was a formidableasset for the recoveryof thosemarkets which had been lost to nativesulphur in previousyears. But, aboveall, the SpanishGovernment's efforts to gain internationalrecognition were incompatiblewith a nationalizationwhich could be interpretedabroad as a plain confiscationof a foreignowned entreprise. It wasimportant not to deter capitalimports at a timewhen they were urgently needed for thereconstruction of the economy. However, most of these argumentswere still valid when the Mines were finallysold to a bankingsyndicate in 1954.Planell, the Ministerof Industryat the time, wasvery critical of the deal.He wasconvinced that Rio Tinto was 361 on thebrink of beinggrabbed as a ripefruit if onlyeconomic policy were left to act a little longer. While the saleof the Mineswent into effect,RTC madegreat efforts to minimisethe heavylosses endured with the continuedoperation of the Mines.It washoped that an increasein foreignprices or an expansionof the worlddemand for pyriteswould ease the positionof the Company.To this end,no effortswere wasted by the Companyto improveits relationshipwith theFranco Government. In 1947,the Board agreed to changethe external of their Spanishbusiness to make it more acceptablein the eyesof Party members.Spanish nationals were thus appointed to seniorposts in the Mine. The Companyalso tried to make the most of its bargainingpower in internationalcircles. On severaloccasions after 1946,it actedas a special envoyfor the Francoregime. As a reward,it enjoyeda more conciliatory attitudefrom the economicauthorities. Requests for higherdomestic prices werenot rejected out of handas had happened in the early1940s. RTC was even grantedaccess to an importantEximbank credit which enabled the Companyto import machineryand spareparts which were vital to sustain mine operations.

Conclusions

TheRio TintoCompany was negatively affected by Governmentaction bothin Englandand Spain throughout the 1940s.As I havealready argued, theBritish interest in theMines laid entirely in theirpolitical value once they hadceased to be a reliablesource of pyritesfor Britishindustry. The Spanish attitudeshared elements with the Britishposition. It did not escapethe Spaniardsthat gainingcontrol over Rio Tinto could have important propagandaexternalities, especially as the legitimacyof the regimewas increasinglyquestioned by Allied countries.The BritishGovernment would neverhave agreed to returnGibraltar nor acceptedits loss by force. Rio Tinto was thus an excellent second best to fulfill Franco's desire to show the world thathis regime would not give in. Othercountries, like Germany,also shared an interestin the Mineswhich could help them to satisfytheir requirements for strategicraw materialsin wartime. RTC stoodat the centreof thistriangle. It is evidentthat the attitudes whichderived from thesenational positions escaped from the controlof the miningcompany. There was little scopeto ride out the stormof early Francoismor to improveon the badreputation and record of the Company in Spanishpolitics. The Companyhoped to makethe mostof the highly symbolicvalue which was placed by the Spanish government on theownership of Rio Tinto.In thisconnection, it can be arguedthat the Companygrossly overestimatedthe reactionsof the Government.They believedthat the Governmentwould be preparedto perform any sacrifice,no matter how costly,for the sakeof Riotinto.It wouldseem that theymiscalculated the severityof the collapseof theSpanish economy. There were only a fewcards thatcould be safelyplayed by the Company. It wasthus forced to complywith the demandsof the Francoistregime in orderto cut downits financiallosses. In thisfield too, the performanceof the managerswas quite clumsy. They 362

failed to find a way to avoid further friction with the civil servantswho occupiedkey decisionposts within the new Administration.One might be temptedto seethis as a matter of recurrentmistakes by the management. However, their past performance,together with numerousevents which adverselyaffected the economicenvironment, accounted for most of the misfortunesof the Rio Tinto Companyduring the 1940s.Until the saleof the assetswas finally realized in 1954,the Companyinevitably paid a highprice. To conclude,I will try to assessthe costto RTC of someof the policies implementedboth in Englandand Spain. In a counterfactualsituation where suchpolicies were absent,RTC wouldhave exported all its copperoutput after 1946and would have earned larger peseta balances for its pyritessales. As it mightbe expected,Spanish regulated copper prices outweighed the LME quotationsexpressed in pesetasat the officialrate of exchange(the 1943/44 priceis exceededeven at the free rate of exchange).Once price controls were removedin Englandin 1947,Spanish prices were much lower than LME quotationsexpressed in free pesetas.At the Tangierrate of exchange,copper pricedifferentials fluctuated between a mere 30 per centin 1946and 164per cent in 1952.In a counterfactualsituation, RTC wouldhave earned an extra t25.6million for the years 1946/53 [1, pp. 12-3; 11, p. 391]. It is not yet possibleto estimatethe extra income which would had been derived from the applicationof the free exchangerate to the pyritessales. New researchon contractprices must be undertakenbefore that time. RTC declaredexport pricesof about25 per centless than the real figurein orderto avoidgreater peseta lossesand larger taxation [7, p. 296]. It is obviousthat the overvaluationof the pesetabrought about substantial losses to RTC whenwe realizethat the free exchangerate in 1950was nearly 4.8 timeshigher than the official rate. An alternativecalculation will be basedupon the opportunitycost of the frustratedsale of 1944. Had the Spanishassets been realized, RTC's equityholders would have earned the highdividends which were paid by the Rhodesianinvestments. Of course,the sale price of the Mines cannotbe known.The two partieshad very divergentviews on the real value of Rio Tinto.While the Companyput its value at œ9.265million, the Spanish bankers were preparedto pay only œ2.3million [19]. In later contacts,positions converged7.If we assumethat the final price would have been close to œ7.5 million(which is actuallythe pricepaid in 1954),shareholders would have earneda minimumreturn of œ2.83million by 1954at theinterest rate paidby consolsand a maximumreturn of œ15million at the profitabilityrate of the North Rhodesinn investments8. I havetried to showin this paperhow a Britishfirm wasaffected by economicand politicalconditions in Spainand by mountinginternational confrontationbetween the Francoistregime and the Westernpowers. RTC

7TheBritish brought down the price to œ7.5 million while the bankers increased their bid to L3.5 million.

Sinthe calculation of the accumulative return, I have used the yield on consols [6, p. 104]. 363

found itself in a cross-firesituation where internationalpolitics played a crucialrole. As Sir SamuelHoare liked to put it, RTC wasrightly or wrongly a by-wordin Spain for what the Spaniardswould call the 'dominationof foreigninterests in the life of the country'[4]. For that reason,the daysof foreignownership of the Rio Tinto Mines were dearly doomedafter the triumphof Francoin 1939.It wasthus only a questionof time before the Companywould be forcedto disposeof its SpanishMines whichwere oncethe jewel of the multinationalcorporation. Rio Tinto wascertainly used to transmitabroad the imageof Britishpower. RTC misseda goldenopportunity in 1944to free its assetsfrom the financial burdenof the Generalissimo'sgrip. Other important foreign-owned firms such as ITT's telephonecompany were nationalizedat the time. Finally,it canbe said that a high doseof altruismwas askedfrom RTC to supportBritish foreignpolicy. Sir AlexanderCadogan was thinking about that whenhe stated that, "We haveof courseto be carefulnot to give[RTC] anyencouragement to believethat the Governmentwill indemnifyit for anylosses it may incur shouldit decideto carryon" [9].

References

1. FerdinandBanks, The WorldCopper Market (Cambridge,Mass. 1974). 2. NDespatchfrom Captain Charles to Sir M. Peterson,"(July 13, 1939) Treasury 160/850/14404/101. 3. "Despatchfrom the ForeignO.•ice to Sir M. Peterson,"(May 25, 1939),FO 371/24161. 4. "Despatchfrom Sir S. Hoare to Sir A. Cadogan"(March 9, 1944),FO 371/39691file C.73.13. 5. "Despatchfrom Washingtonto ForeignOd•ice" (February 18, 1942), FO 371/31253file 569. 6. N.H. Dimsdale,"British monetary policy since 1945," in Crafts & Woodward,eds, The BritishEconomy since 1945 (Oxford, 1991). 7. CharlesHarvey, The Rio 7intoCompany (Penzance, 1981). 8. SamuelHoare, Embajadoren misi6nespecial (Buenos Aires, 1946). 9. "Letterfrom Sir A. Cadoganto Sir S. Hoare,"(January 31, 1944),BT 11/1942. 10. "Lettersent to Sir A. Edenby Sir J. Anderson,"(January 19, 1944), FO 371/39691file C.73. 11. Pablo Mart/n-Acefia, NSistemaFinanciero," in A. Carreras, ed, F•tad[sticasHist6ricas de F•par•a, siglosXIX-XX (Madrid, 1989). 12. NMemorandumby Col. Prestonto Sir S. Hoare,N (August 7, 1941),BT 11/1598. 13. •Memorandumof the conversationbetween Ribbentrop and the SpanishMinister of the Interior SerranoSuner in the presenceof AmbassadorVon Stohrerin Berlin in September 24th, 1940,"FO 371/60332file 59802. 14. R.F. Mikesell, The Word CopperIndustry. Structureand EconomicAnalysis (Baltimore, 1979). 15. "Note from the Chairman,"(November18, 1943),RTC 100-B-66. 16. Note Verbalesent by Sir M. Petersonto General G6mez Jordana(May 27, 1939), Ministeriode AsuntosExteriores 1L 1035exp. 15. 17. "eport on Mr Preston'svisit to Spain,"(April 11, 1945),RTC 100-A-34. 18. RTC, Board minutes(June 1, 1939),Book 16 SR1. 19. RTC Board Wing case98.