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(f) Failure to conclude a satisfactory war trade
agreement.
On the other hand, the Foreign Office admit that in the earlier stages of the war Portugal was most helpful in meeting British requests, particularly those put forward by Service Departments.
4.
To meet this situation the Foreign Office have instructed His Majesty's Ambassador to make a strong
This they personal appeal to Dr. Salzar,
consider, however, may well end in failure,
and
they are therefore contemplating measures to coerce Portugal into adopting the necessary degree of benevolence. In particular, they are considering exerting some form of economic pressure, possibly by denying to her essential
The possibilities raw materials under British control. are being examined by the Ministry of Economic Warfare.
5.
Meanwhile, in the light of this situation, they are reviewing the whole range of Anglo-Portuguese relations and have asked that the Chiefs of Staff should say whether they still adhere to their previous view that it is in our best interests that Portugal should remain neutral, while refraining from making any declaration of neutrality.
6.
We submit the attached draft report in fulfilment of these terms of reference. As will be seen, we have confined our examination entirely to the strategical aspects of the position of Portugal in the existing state of the war.
(Signed) V, H. DANKWERTS.
IS,C. PLAYFAIR.
J.C. SLESSOR.
Cabinet War Room,
6th March, 1940.
* C.0.5. 973 dated 1st September, 1939,
car 2
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