TELEGRAM TO BRITISH EMBASSY,_WASHINGTON
 
      FROM FOREIGN OFFICE DATED MARCH 28th.
 
      
 
 
We are much concerned at recent heavy increase in German pressure 
      on Portugal. This pre %ssure is taking the form of (a) propaganda 
      in the German press and wireless often minatory in character 
      and containing frequent references to alleged British and United 
      States designs on Portuguese territory. (b) A great increase 
      in the numbers of German officials, business men and tourists 
      in Portugal, who may be organizing Fifth Column activities and 
      have already had some effect on Portuguese press. There are reports 
      of increased German influence over Portuguese international (sic) 
      police. (c) Increased activity of Germans in Cape Verde Islands.
 
      
 
 
2. There are accordingly serious indications that Germany 
      is preparing the ground for possible action in the Iberian Peninsula.
 
      
 
 
3. Control of Portugal would give Germany working advantages 
      in the battle of the Atlantic and would also put an end to any 
      serious possibility of Spanish resistance to German pressure. 
      The likelihood of an air-borne or sea-borne invasion accompanying 
      an internal coup of German kind cannot be excluded in view of 
      the comparatively defenceless position of Portugal. Transit through 
      Spain might then be unnecessary.
 
      
 
 
4. We have warned Portuguese Government of the dangers of 
      German infiltration and there is no doubt of their desire to 
      resist German pressure. But it is uncertain whether in view of 
      the limited military support which we can at present afford, 
      the Portuguese Government will withstand the continued heavy 
      pressure or in the end offer armed resistance to the German attack.
 
      
 
 
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