RG 84: Portugal
State Department and Foreign Affairs Records
Records of the Foreign Service Posts of the Department of State (RG 84)
Portugal
Portugal, under the rule of Antonio Salazar, remained a neutral throughout the war, despite the terms of her alliance with Great Britain. Portugal had a centuries-old alliance with the British, as well as close economic and trade relations (Great Britain was Portugal's leading trading partner), as well as Portugal's dependence on United States petroleum, coal, and chemical supplies, which influenced its conduct during the war, and thus could be described at one level as a pro-Allied neutral. And yet Portugal carefully maintained a balance in its trade between the Allies and the Axis. After all, Germany was Portugal's second largest trade partner, and enjoyed significant advantages, particularly after Germany's occupation of France gave it a direct overland route to the Iberian Peninsula, through which it could both supply Portugal with greater quantities of imports than the Allies and pose a military threat if Portugal attempted to curtail exports important to the German war effort.
The Germans had many financial interests and ties with the Portuguese. I.G. Farben and other major German concerns, such as E. Merck and Siemens, had fairly large interests in Portugal. The official German purchasing agency in Portugal during the war was Soc. Financiera Industrial Ltda .(SOFINDUS). This organization purchased Portuguese products for the Germans and coordinated the operations of various German firms in Portugal.
Portugal allowed Great Britain to trade and receive credit backed by the pound, allowing the British to obtain vital goods at a time when it was short on gold and escudos. By 1945 the British owed Portugal over $322 million under this arrangement.
Portugal provided the Axis less formal but also advantageous trade facilities, permitting Germany and Italy to incur sizable debts in their clearing agreements with Portugal and advancing them significant amounts of escudos in government and private contracts. Deficits under the Portuguese clearing agreement with Germany averaged between $5-9 million between 1943 and 1944. Also, Portuguese merchants were an important source of vital smuggled commodities to the Axis, including industrial diamonds and platinum from Africa and Latin America.
The heated competition between the belligerents for its important resources greatly benefited Portugal's economy and generated large profits for its businesses and banks. Although the Allies took a far greater share of Portugal's strategic goods during the war than the Axis did, Portugal exported one material to Germany without which, the Allies believed, Germany could not continue to wage war: wolfram, which when refined into tungsten and used in the steel-hardening process had myriad vital industrial and military uses. Germany and Portugal negotiated secret agreements in accordance with which Portugal exported an average of over 2,000 metric tons of wolfram to Germany annually between 1941 and mid-1944, about 60 percent of Germany's estimate minimum industrial requirement.
Germany paid for its Portuguese imports, including wolfram, with German goods and escudos, as well as gold (most of which came through Switzerland) and Swiss francs purchased with gold. Estimates of the total amount of looted gold received by Portugal ranged from $50.5 million to $106.6 million. When pushed by the Allies for information about the gold it had received, Portugal did not respond.
The Allies' objective was to purchase enough of wolfram to satisfy Portugal's export demands and prevent as much as possible from going to the enemy. Portugal's trade with the Allies and Axis worked to its great advantage as both sides paid inflated prices for wolfram. Portugal profited so much from the wolfram trade that it maintained its wolfram exports to Germany well into 1944 in the face of growing from the Allies to curtail that trade, which was far more important to the German war effort than to that of the Allies.
In January 1944, the Allies began to pressure Salazar to embargo all wolfram sales, but Portugal resisted, defending its right as a neutral to sell to anyone and fearing that any reduction in its exports would prompt Germany to attack Portuguese shipping, bomb Portuguese cities, or even launch an invasion from occupied France across Spain. The United States could have used greater threat of an oil embargo to compel Portugal to end the trade with Germany, but they placed greater importance on negotiating access to air and naval bases on the Azores. Portugal, despite its neutrality, granted the British access to the Azores bases in October 1943 and extended such access to the United States a year later.
On the eve of the D-Day invasion in June 1944, after the Allies threatened economic sanctions, the Portuguese government imposed a complete embargo on wolfram exports to both the Allies and the Axis.
Anticipating Germany's collapse, the Portuguese Government on March 18, 1945, issued a decree on "movable property" which recognized the United Nations' position on loot. On May 14, 1945, the full Safehaven objectives suggested to the Portuguese Government by the American Embassy were achieved. In an official decree Portugal declared adherence to Bretton Woods Resolution VI, froze all German assets regardless of custody or location, arranged for a census of German assets and nationals, and prohibited the importation and exportation of foreign currency. The Portuguese Government took over German official establishments in Portugal "pending the emergence of a government in Germany."
Negotiations with Portugal for the restoration of looted gold, estimated by the Allies in July 1946, at $139.3 million, and the disposition of German external assets, estimated in June 1946 at $36.8 million, began in September 1946. The Allies initially sought about $51 million (Investigations in 1947, however, indicated that the Bank of Portugal had received between $43 million and $53 million), but Portugal offered only $4.4 million for which it expected full compensation from liquidated German assets. The two sides reached a tentative accord in February 1947, in which the Portuguese agreed to give up roughly $4 million in liquidated German assets in exchange for as much as $7.2 million for their claims against Germany. But the accord was not implemented because of an impasse over looted gold.
The Allies lost some of their negotiating leverage when the United States unblocked Portuguese assets in the United States in August 1948.
As gold negotiations dragged on into the 1950s and the value of these assets depreciated the State Department grew frustrated and convinced a reluctant Treasury Department to agree to Portugal's terms. The Department of State also feared that the impasse might jeopardize what it considered to be the more important strategic goal of gaining United States access to an Azores air base and integrating Portugal into postwar Europe. Finally, in October 1958 the United States, Great Britain, France, Portugal and West Germany reached an agreement, and in December 1959 Portugal delivered $552,000 to the Allies and about $4.5 worth of gold to the Tripartite Gold Commission. In addition, Germany paid Portugal about $13.7 million to reimburse it for the gold and to cover its wartime damage claims, for which Germany received still-unliquidated German assets in Portugal. (Note 88)
Records of The U.S. Embassy, Lisbon, Portugal
Lisbon was the chief distribution port for International Red Cross Committee relief supplies to prisoner-of-war and internment camps; the main link for civilian flights between the United Kingdom and the United States; and, a notorious center for spies.
Lisbon became the center for tens of thousands of refugees from Central Europe, the Low Countries, and France. The Portuguese Government allowed Jewish organizations to relocate from occupied Europe to Lisbon during the war. Although Portugal sought in 1940 to halt the entry of refugees and the issuance of visas for them, many Portuguese disregarded their government's policies. Aristides de Sousa Mendes, a Portuguese diplomat in Bordeau, France, disobeyed his government's orders and issued 10,000 visas before he was recalled and dismissed. During 1941 and 1942 the Portuguese Government allowed 5,000 refugees to pass through Portugal to the United States.
General Records 1936-1945, 1950-1952 (Entry 3126)
Boxes 1-137
1941
Box# File # File Title or Subject
40 711.3 Trading With Enemy location:
350/58/67/10/02
40-41 800
Political Reports
46 848 Relief, Refugees
851.6 Banking, Frozen Assets, etc.
1942
Box# File # File Title or Subject
52 631 Trade Relations
53 710 Spain-Portugal
711 Germany
711.2 Neutral Shipping
58 800 Azores
800 Bolivia
800 France
800 Italy
800 Morocco
800 North Africa
800 Portugal
800 Rumania
800 Spain
800 Vatican
800 Yugoslavia
800.1 Franco-Salazar Meeting
60 820.2 Axis Espionage
61 848 Relief Measures
850 Economic Matters
850.6 Insurance
851 Financial Matters
851 Reported Activities of German Authorities at Paris
in Seizing
Holdings in French Controlled Companies in Argentina
851.51 Report-"Switzerland, The Reich's Foremost Supplier of
Foreign Exchange," June 26, 1942
851.6 Banking
854 Inventions, patents, Trademarks
62 863 Mines, Including Tungsten and Wolfram
863.4 Diamonds
63 871 Mail Intercepts
1943
Box# File # File Title or Subject
69 624.4 Smuggling
631 Trade Agreements-German Foreign Trade
631 Trade Agreements-Portugal Trade with Axis and Axis
Occupied Countries
631 Trade Agreements-Portugal-France and North Africa
631 Trade Agreements-Portugal-French Moroccan Trade
631 Trade Agreements-Portugal-Hungary
631 Trade Agreements-Portugal-Spain
631 Trade Agreements-United States-Italy
631 Trade Agreements-United States-Spain
710 Political Relations-Japan-Portugal
710 Political Relations-Spain-France
710 Political Relations-Spain-Germany
710 Political Relations-Spain-Portugal
710 Political Relations-Miscellaneous
70 711 Germany
711 Implementation of the Anglo-Portuguese Agreement
711 Italy
711 Joint Declaration of United Nations Governments toward
Transfer of Property in Enemy-Controlled Areas
711 Attitude Toward Neutral Nations (President Roosevelt's
Speech)
711.1 Neutrality
711.3 Enemy Property
711.5 German Exchange with Latin America
loc: 350/67/10/06
71-72 800
Political Reports
75-76 820.02
Subversive Activities
77 848 Relief, Refugees
78 850.6 Insurance
851 Foreign Funds Control
851.6 Banks, Banking
854 Trademarks, Inventions
79 863 Mines, Mining
863.4 Diamonds and Diamond Smuggling
863.4 Gold
863.5 Base Metals
80 871 Mail Intercepts
1944
Box# File # File Title or Subject
88 624.8 Smuggling
624.8 Smuggling-Diamonds
624.8 Smuggling-Gold
624.8 Smuggling-France-Spain
631 Trade Relations-Anglo-America
631 Trade Relations-United States-Spain
631 Trade Relations-General
89 710 Political Relations-Argentina with
Bolivia, Denmark, and
Argentina
710 Political Relations-Chile with Italy
710 Political Relations-Portugal with Argentina, Brazil,
France, Germany, Italy, Japan, Netherlands, and Spain
710 Political Relations Spain with France, Germany, Great
Britain,
Hungary, Japan, and Mexico
711.2 Neutral Trade
90 711.3 Trading With Enemy-Administration
and Personnel of
Safehaven Project
711.3 Trading With Enemy-General Correspondence
on Flight of
Capital, Looting, etc.
711.3 Trading With Enemy-Individuals location:
350/67/11/02
92-95 800
Political Reports
99-100 820.02 Axis Activities
101 840.3 Fine Arts
848 Relief Measures
102 850 Economic Matters
850.6 Insurance
851 Foreign Funds Control
851 Financial Conditions-Funds Control of Individuals
and
Companies
851 Financial Conditions-German Assets
851 Financial Conditions-Italian Assets
851 Financial Conditions-Swiss Blocking of Funds
851 Financial Conditions-General Correspondence
851.51 Exchange
851.6 Banks, Banking
851.6 Swiss Banking Agreement
103 854 Copyrights, patents, Trademarks
863 Mines, Mining
863.4 Precious Metals-Gold
863.4 Precious Metals-Diamonds
863.5 Base Metals
105 871 Censorship Intercepts
1945
Box# File # File Title or Subject
115 600 Commercial Relations
624.4 Smuggling
631 Trade Relations-British/American Agreements
631 Trade Relations-with Spain and Portugal
631 Trade Relations-Hispano/Italian Agreements
631 Trade Relations-Hispano/Swiss Transit Trade
631 Trade Relations-Supply Purchase Agreement
631 Trade Relations-Trade Agreements Act
631 Trade Relations-Wolfram
117 710 Political Relations-General
710 Political Relations-Portugal-American
710 Political Relations-Portugal-Japan
710 Political Relations-Russia
710 Political Relations-Great Britain-Spain
710 Political Relations-Russia-Japan
710 Political Relations-Germany-Spain
710 Political Relations-United States-Brazil
711 Reaffirmation of Portuguese Neutrality Following
Turkish and
Egyptian Declarations of War
711.1 Neutrality, Neutrals
711.2 Trading With Enemy
711.3 Safehaven
117-120 800 Political Reports
124 840.3 Looted Art
848 Relief
848 UNRRA
850 Economic Matters
125 850.6 Insurance
851 Foreign Funds Control
851 Foreign Funds Control-French Assets
851 Foreign Funds Control-German Assets
851 Foreign Funds Control-Italian Assets
851 Foreign Funds Control-Individual Cases
851 Gold Declaration
126-128 851 Safehaven
129 851.5 Portuguese Gold Transactions
851.6 Banks, Banking
854 Patents, Trademarks, and Copyrights loc: 350/67/12/01
130 871 Censorship
879.6 Deutsche Lufthansa
Classified General Records (Confidential File) 1941-1949, 1950-1952 (Entry 3127)
Boxes 1-46
1941
Box# File # File Title or Subject
3 300 Refugees
624.4 Smuggling
711 War
800 Political Reports
820.02 Axis Activities
1942
Box# File # File Title or Subject
4 631 Supply Purchase Agreements location:
350/67/12/02
1943
Box# File # File Title or Subject
5 631 Supply Purchase Agreements
820.02 Intelligence Reports
1944
Box# File # File Title or Subject
6 631 Supply Purchase Agreements location:
350/67/12/03
1945
Box# File # File Title or Subject
7-8 631 Supply Purchase Agreements
8 631 Supply Purchase Agreements-Wolfram
710 Political Relations
710 Political Relations United States-Portugal
710 Political Relations United States-Brazil
711 Germany
711 Japan
711 Portugal
711 Spain
711.1 United States Proposal for Allied Economic
Policy Toward
Neutral Countries
711.1 Minutes of European Neutrals Committee
loc: 350/67/12/03
9 800 Political Affairs-General
800 Political Affairs-Argentina
800 Political Affairs-Finland
800 Political Affairs-Germany
800 Political Affairs-Hungary
800 Political Affairs-Italy
800 Political Affairs-Japan
800 Political Affairs-Poland
800 Political Affairs-Portugal
800 Political Affairs-Rumania
800 Political Affairs-Spain
800 Political Affairs-Tangier
800 Political Affairs-Yugoslavia
9-10 820.02 Military Activities-Intelligence Reports
820.02 Military Activities-Weekly Intelligence Meetings
820.02 Military Activities-Individual Cases
10 851 Funds Control-General
851 Funds Control-Monetary Agreement
851 Safehaven-Sale of German Vessels
851 Safehaven-Individual Cases
851.6 Banks, Banking
879.6 Lufthansa
11 851 Safehaven
1946
Box# File # File Title or Subject
12 631 Portugal-Germany [includes Safehaven
information]
13 691 Navicert Control
711.2 Safehaven
13-14 800
Political Reports
15 840.3 Looted Art
850 Annual Economic Review of Portugal for 1945
16 851 Foreign Funds Control
851.5 Gold
851.6 Banks, Banking
Top Secret General Records 1945-1949
(Entry 3128)
Box 1
Top Secret Subject Files 1946-1952 (Entry 3129A)
Includes folders labeled: Safehaven (1947-1948); German External Assets
1950-
1952); and, Safehaven Files (1950-1952)
Box 1
General Records Relating to War Refugees 1942 (Entry 3130)
Box 1
Subject Files Relating to War Refugees 1944-1945 (Entry 3131)
Box 1
Records Relating to German External
Assets in Portugal 1947-1956 (Entry 3138)
Box# File # File Title
1 236 German Assets: Financial Statements Allied
Committee 1950-1952
Allied Committee Minutes 1950-1952
321.3 Liquidation German Assets - Citations and Applications 1950-1952
321.3 Liquidation German Assets - Four German Shipping Companies
1950-1952
321.3 German Assets - Sale of Books - German Legation Building 1952
321.3 Safehaven - Deblocking (Portuguese Decisions) 1951-1952-1953
321.3 Safehaven - Deblocking (Allied Committee) 1950-1952, 1953
2 321.3 Safehaven - General 1949
321.3 Safehaven German Assets 1950
321.3 Safehaven German Assets - General 1951
321.3 Safehaven German Assets Bavarian Gallery Paintings 1950-1951,
1952, 1955
321.3 Liquidation of German Assets - Mozambique 1950, 1951
321.3 Safehaven - Japanese Assets 1950-1952
321.3 Liquidation of German Assets - Sheepskins 1951
321.3 Safehaven - Radio Marconi 1951
321.3 Safehaven - Liquidation of German Assets - Angola 1950-1952
321.3 Safehaven - German Assets 1952
321.3 Safehaven "Unfreezing Cases" General 1952-1953
3 Decrees and Agreements
Re German Assets
321.3 Minutes of Portugese Liquidation Commission Meeting 1950-1953
321.3 Safehaven - Special Tribunal Decisions 1952-1954
Safehaven "A"
Safehaven "B"
321.3 Safehaven German Assets Securities 1953-1955
321.3 Liquidation German Assets - Citations and Applications 1953-1955
321.3 German Assets - Financial Statement Allied Committee 1956
Subject Files of the Financial Attache, James E. Wood 1942-1945 (Entry 3139)
Boxes 1-3
Box # File Title
1 Banks
Bank of Portugal
Deutsche Bank
Spanish Banks [includes a 174-page report prepared by the Foreign Funds
Control, March 1945, entitled "Four Leading Spanish Banks," that
includes information on Banco Hispano Americane, Banco Espanol
de Credte, Banco de Bilbao, and Banco de Visquije.
Swedish Banks
Foreign Exchange
2 Blocked Assets-Swiss Government
Bretton Woods
3 Italian Affairs
Gold-General
German Government Assets
Treasury Directives-General
Treasury investigative Reports
Portuguese Financial Position
Company and Individual Files
of the Financial Attache, James E. Wood, 1943-1945
(Entry 3140)
Box 1