49 paid for with funds transferred to Japan via the BIS. It was Germany’s need for essential raw materials that fueled the money-laundering operations of the BIS and the Swiss banks. Coincidentally, some of the most critical resources were to be found in Europe’s neutral countries—Swedish iron ore, Turkish chromium, and Portuguese and Spanish wolfram—the latter being essential for the manufacture of tungsten, which was used to make machine tools and armor-piercing ammunition. Both Portugal and Spain were ruled by fascist dictators sympathetic to the Nazi cause. António de Oliveira Salazar of Portugal played a canny game, trading with both the Allies and Germany. His regime depended on America for oil and wheat but was willing to sell wolfram by a strict quota system on a cash-and-carry basis that inevitably inflated the cost of the ore—by 1943, wolfram commanded eight times the prewar price, and the Allies alone paid $170 million for wolfram to Portugal and Spain during World War II. While Britain and America paid respectively in pounds sterling and U.S. dollars, Germany was obliged to pay in gold. At the outbreak of the war, Salazar had declared that Portugal would remain strictly neutral and would “adhere to an iron principle—we shall not try to exploit the conflict for pecuniary gain.” In 1939 the Banco Nacional de Portugal held 63 tons of gold; by October 1945, its reserves stood at 356.5 tons. [5a] In 1939 the Spain of Gen. Francisco Franco—El Caudillo (The Leader)—was indebted to Germany to the tune of $212 million for its military and financial support during the Spanish Civil War of 1936–39. Although Spain deployed the “Blue Division” of fascist volunteers to fight with the German army against “Bolsheviks” on the Russian Front, it maintained its neutrality with both Germany and the Western Allies. Spain was a ready source of wolfram and other highgrade ores, such as pyrite, as well as lead, mercury, phosphates, and zinc, and foodstuffs, particularly citrus fruits. Germany paid for all of them with gold, manufactured goods, and weapons. Equally important was Spain’s role as a conduit for illicit trade with South America, particularly Argentina, which continued throughout the war despite the Allies’ illegal naval blockade of the Iberian Peninsula. Portugal, in its turn, provided a similar conduit to Brazil. Both America and Britain placed a high priority on sustaining Spain’s neutrality. If Franco joined the Axis powers, then British Gibraltar would inevitably be captured and the western gate of the Mediterranean Sea closed, forcing Allied oil tankers to sail all the way around Africa via the Cape of Good Hope. To keep Franco amenable, the Allies provided Spain with large quantities of grain and petroleum products. Indeed, Spain’s complete tanker fleet was kept busy throughout the war transporting oil from Venezuela to Spain, courtesy of Standard Oil and the Texas Oil Company, which charged the U.S. government accordingly. For a simple agrarian society such as Spain, this traffic provided a significant surplus of oil over the country’s needs and the difference was sold on to Germany. By the end of the war, Spain had paid off all its debts
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