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The British Government officially deplores the recent slaughter of Spanish civilians in Guernica, an incident in the Fascist march on Bilbao. Unofficially, the Government realizes that if the city falls, a crisis with Germany will be precipitated. The reason is Spanish iron. Neither England or Germany own much iron internally, but in recent years England has made up its deficit from Spain, which is just what Germany would like to do. Control of these mines, all of which send ore to the sea via Bilbao, seems to be the greatest objective of German troops in Spain.
England exhausted her iron faster than coal, and now finds it convenient to export coal to such a city as Bilbao, bringing the ships home laden with ore. British capital and coal has enabled the city to build up a steel industry, though three-fourths of the iron that reaches the city is exported to England. Germany has never had sufficient iron. It is no accident, therefore, that the headquarters of the German "volunteers" in Spain have been set up at Devo, thirty miles from Bilbao, and these troops are leading the attempt to reduce the defenses of the Northern loyalist stronghold.
Just what form such control would take is not definite. Loyalist sources tell that German advances have been made, proposing secession from the rest of Spain, probably to result in a state under German protection. The character of the defenders makes it unlikely that anything short of annihilation will bring them to terms. It seems that something of this sort will be the result, with some degree of German influence a surety. This will present a situation that will require strong action on the part of the British. It is an opportunity to use Briain's sea power, and try a bluff of war to quiet a man who has laughed at Europe after a series of successful bluffs himself. The situation will require something stronger than "muddling through", and how the British face it will determine the future of their prestige.
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