Hitler’s fury, Franco’s guile and the bribe that saved the world

In 1940, the Nazis hatched a plan to prise Gibraltar from the British and seize control of the Mediterranean. Luckily for the Allies, the road to the Rock lay through Spain – and, as Jules Stewart reveals, General Franco's top brass could be bought...

Adolf Hitler (left) and his interpreter (centre) talking to Spanish leader Francisco Franco. (Photo by Time Life Pictures/US Army Signal Corps/The LIFE Picture Collection/Getty Images)

This article was first published in the October 2016 issue of BBC History Magazine 

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Adolf Hitler was in a particularly foul mood on the afternoon of 23 October 1940. Pacing furiously about the railway platform at the French town of Hendaye, near the Spanish border, he held his arms rigidly at his side in the way that had set Neville Chamberlain’s teeth on edge at the Munich Conference two years previously. Generalissimo Francisco Franco’s train was late, confirming the German delegation’s suspicions that the Spanish were a hopeless lot.

When at last the pudgy little general with the squeaky voice alighted from his railway carriage, the smile on Hitler’s face belied a premonition that he was heading for an exasperating encounter. And he was. “I would rather have four of my teeth pulled out than deal with that man again,” Hitler reportedly confided to Benito Mussolini a few days later.

For seven hours Hitler struggled in vain to persuade Franco that his non-belligerent nation should enter the war. The wily Spanish leader demurred, knowing that he had little to lose by making demands the Nazi leader would almost certainly dismiss as unacceptable. Franco assured the führer and his foreign secretary Joachim von Ribbentrop, who was present at the meeting along with his Spanish counterpart Ramón Serrano Súñer, that he would join the Axis powers at some unspecified future date. What he asked in return was nothing less than France’s north African colonies and French Cameroon, along with German supplies of armaments, and food for his people, who were suffering horrible depredations after three years of civil war. Then he revealed the icing on the cake: he requested the transfer of Gibraltar to Spanish sovereignty once Britain was defeated.

A rocky past

‘Return’ would be more accurate. Gibraltar was captured from the Moors in 1462 by the Castilian nobleman Juan Alonso de Guzmán, leaving as its only indigenous north Africans the colony of Barbary macaques whose 300 descendants continue to thrive in the Upper Rock area. Gibraltar remained under Spanish dominion for more than 250 years until the War of the Spanish Succession.

In 1704, the two-square-mile peninsula that controls the entrance to the Mediterranean was captured by an Anglo-Dutch naval force under the command of Sir George Rooke, who bombarded the Rock into submission in the name of Queen Anne. Under the Treaty of Utrecht, signed in 1713, Gibraltar was ceded “in perpetuity” to Britain, and now enjoys the status of a UK overseas territory – to the everlasting annoyance of the Spanish government.

After his bout with Franco, Hitler’s next stop was another railway carriage meeting in France, where he was to seal an agreement on collaboration with France’s puppet Vichy president Marshal Philippe Pétain. The führer might well have imagined how the 84-year-old hero of the First World War would have reacted to the news that his country’s African possessions were to be handed over to Franco. Hitler made it clear in a directive issued after the fall of France that “the most pressing task of the French is the defensive and offensive protection of their African possessions against England and the De Gaulle movement”. This would ensure France’s participation in the war against Britain, the only European belligerent still infuriatingly holding out against the Nazi war machine.

But Hitler needed Franco. If Britain could not be crushed by aerial bombardment – a reality the führer had to swallow by mid-September 1940, when it became clear that the Luftwaffe had failed to gain air superiority in the Battle of Britain – then the enemy must be strangled into submission. That meant closing the Strait of Gibraltar.

Professor Hugh Trevor-Roper later spelled out the consequences that would have followed a German invasion of Gibraltar: “The Axis would have obtained control of the whole Mediterranean, cut off the British Army in the Middle East and closed a whole future theatre of war. What hope of ultimate victory could even Churchill have then held out?”

Crucial gateway

Hitler harboured no doubts that Gibraltar held the key to Britain’s ultimate defeat. In a later letter to Franco, the Nazi leader reprimanded his Spanish counterpart for refusing to ally himself with Germany and permit the Wehrmacht to march across the country to storm Gibraltar. “The attack on Gibraltar and the closing of the Strait,” Hitler lamented, “would have changed the Mediterranean situation in one stroke. If we had been able to cross the Spanish border… Gibraltar would today be in our hands.” The führer was convinced that depriving Britain of access to the Mediterranean “would have helped to decide world history”.

Hitler could not be accused of failing to give it his best shot. Operation Felix, the codename for the German offensive against Gibraltar, suffered from only one major handicap: the lack of Spanish acquiescence. What the Nazi leadership envisaged was the free passage of German troops through Spain under the cover of a formal diplomatic protest, thus providing camouflage to refute British charges of Franco violating his commitment to neutrality.

It’s a stretch to imagine Franco could have convinced Britain that Spain had been overrun against his will. British intelligence was aware of Hitler’s plan to involve Spain in his attack on Gibraltar. A top secret Special Operations Executive memorandum mentions Germany’s intention to use Spanish ships and railways to carry supplies disguised as ordinary imports, and the use of Spanish aerodromes by Luftwaffe fighters and bombers.

When Hitler returned to Berlin in November 1940, he issued a directive setting out the details of Operation Felix, starting with reconnaissance missions by German agents to explore Gibraltar’s defences and airfield. Special units of the German Foreign Intelligence Department “in disguised co-operation with the Spanish” would shield the area from British attempts to discover preparations for the attack, which would begin on day 39 after German troops entered Spain.

Hitler’s battle strategy was to assemble an attack force composed of two army corps, an SS division and an air corps. The 49th Army Corps was tasked with engaging Gibraltar’s 11,600-strong garrison. The 39th, its flanks protected by the SS division, was to stand ready to invade Portugal in the event of an Allied threat from that direction. The Luftwaffe would occupy six aerodromes in and around the Atlantic coastline to launch an aerial barrage on the Royal Navy.

The Nazi high command mapped out Operation Felix with painstaking precision: four guns to protect the eastern flank, another four to the south, a three-column assault on the town and, followed by the storming of the Royal Battery, the shipment of 13,000 tonnes of ammunition, 7,500 tonnes of fuel and 136 tonnes of food daily to feed the troops.

British intelligence was under no illusions about the outcome of a successful Operation Felix, noting: “The strength of German artillery would have been overwhelming and it is considered that most of our heavy equipment and anti-aircraft batteries would have been knocked out.” Of course, ‘What if’ is an unsatisfactory approach to history. The fact is, Operation Felix never happened, so does not form part of the fabric of historical events. And the underlying reason it never happened was Franco, who by no means accepted the inevitability of an Axis victory.

Nevertheless, the British government remained gravely concerned about the German threat to Gibraltar. Winston Churchill acknowledged that his two greatest concerns at that stage of the war were the loss of Gibraltar and the U-boat attacks on Atlantic convoys. Churchill feared that the Nazis might lose patience with Franco, and would then send an army across the Pyrenees any time after April 1941, with Franco powerless to resist a Wehrmacht onslaught.

Churchill reasoned that because Gibraltar was not equipped to hold out against a German siege, the solution was to stop it happening. Acting on a suggestion by the naval attaché at the British embassy in Madrid, the colourful adventurer Alan Hillgarth, Churchill launched one of the most audacious political gambits of the war: the distribution of US$13m in bribes to top-ranking Spanish military figures, who would ensure that Franco adhered to his commitment to neutrality – if necessary, by launching a coup d’état. The money had already started to flow in the summer of 1940, before Hitler’s frustrating meeting with Franco.

Disguising the bribes

The source of this money had to be kept secret at all costs. If Britain’s cover were blown, no Spanish general would risk taking bribes from Perfidious Albion. The intermediary was Juan March, a banker of impeccable Francoist credentials. At the time he was the world’s sixth wealthiest man and Franco’s principal financier during the civil war.

Having operated as a double agent in the First World War, March was highly skilled in covert activities. He was also a supporter of the Spanish monarchy and its enlightened heir apparent Don Juan de Borbón, who was a connoisseur of Scotch whisky and a former officer in the British Royal Navy. Despite his right-wing proclivities, March opposed Spanish entry into the war. He knew full well that Hitler had little sympathy for the monarchist cause and even less for the open-minded Don Juan.

March acted as the conduit for the transfer of $10m to Swiss Bank Corporation in New York, later to be topped up with another $3m. Some $2m of this money found its way into the pocket of Franco’s older brother Nicolás, who used his windfall to build a sizeable business empire after the war. Valentín Galarza was another high-ranking beneficiary of British largesse. His appointment as interior minister had come as a heavy blow to Franco’s brother-in-law, the suave, moustachioed Ramón Serrano Súñer, a rabid Hitlerite with film-star looks. As foreign affairs minister he had exercised de facto control over policing, a role now usurped by Galarza, who could be counted on to frustrate Serrano Súñer’s pro-Nazi belligerence.

In all, eight top-echelon officials and a number of well-placed lower ranks were drawn into the operation. The British Foreign Office has declassified the secret correspondence concerning the bribes, but telegrams held in Spanish archives seem to have vanished. Nevertheless, the bribes served their purpose. Their recipients neutralised hardliners in the Franco entourage who were beating the war drums. By mid-1941, Hitler had turned his war machine east and Churchill could breathe easier. Had Gibraltar been lost, Britain would have attempted to capture the Canary Islands to secure a naval base; after Germany invaded Russia, Churchill was able to shelve that plan.

Hitler never forgave Franco for refusing to allow the Wehrmacht to access Gibraltar from Spanish territory. In his mind Franco and his regime went “beyond the pale of [sic] the law… with the blessing of the priesthood, at the expense of the rest”.

A few weeks before his death, Hitler dictated his political testament to his private secretary, Martin Bormann. Reflecting on his aspirations for Gibraltar, he claimed that: “The easiest thing would have been to occupy Gibraltar with our commandos and with Franco’s connivance, but without any declaration of war on his part.” This “would have changed the Mediterranean situation in one stroke”. Neither the führer nor Franco was aware of the forces that had been working secretly to prevent that outcome.

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Jules Stewart is an author and former Reuters correspondent. He lived in Spain for 20 years and has written widely on that country.