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As a preliminary Serrano Suñer delivered a short and voluntary message of Generalissimo Franco, in which the latter expressed to the Fuehrer his gratitude, sympathy, and high esteem, and emphasized to him his loyalty of yesterday, of today, and for always. Franco had commissioned him to bring about a direct contact with the German Government in this decisive time. Since he had already informed the Reichs Foreign Minister of the Spanish wishes, he did not at the moment want to come back to that again, but only wished to emphasize that the Spanish attitude toward Germany had not changed in the least. It was not a question of a revision of the Spanish foreign policy, but only of a clarification of the conditions under which Spain was ready to fight the war together with Germany. Whenever Spain's supply of foodstuffs and war material was secure she could immediately enter the war. With reference to the war material, Suñer declared that the details of the Spanish wishes had been conveyed to Admiral Canaris and Suñer made precise the wish for placing artillery at their disposal specifying that the Spaniards considered ten 38-centimeter guns necessary for Gibraltar.
The Fuehrer replied that the German people had not forgotten the stand which Spain had taken in the World War and that this feeling of appreciation had been the most profound cause for the German conduct during the Civil War. Now Germany was in the decisive struggle against England. Continentally this struggle was already decided. A British landing on the Continent was to be characterized as an absolute chimera. The only military possibility still existing was an attempt by England to alienate the French colonies in North Africa from the Pétain government and use them as a new position for the continuation of the war. Aside from that, England had no more opportunities whatever for penetration into the European Continent, from Norway to Spain and Portugal.
In this connection, Suñer pointed to the Spanish fear concerning an English landing on the Cantabrian coast and in this regard mentioned that Communistic elements in the population of the Asturias would render the situation very complicated in the event of such a landing attempt. The Fuehrer replied that he could set Suñer's mind at rest in this respect on the basis of landing experiences with landings in Norway where indeed the entire population had been on the side of the English, and the latter, in spite of that, could achieve no success.
In Norway it had also been shown that coast artillery was not suitable for repelling an attack, but instead that air defense brought the most favorable results. If a group of Stukas and a group of heavy pursuit planes were made available for the conquest of Gibraltar, then within eight days no enemy ship would any longer dare to venture into these Spanish areas within a radius of 350 kilometers for the heavy bombs of 1,800 kilograms which these machines carried could perhaps not completely destroy a ship but with a direct hit would render it so incapable of battle that a repair of several months would be necessary. The English, however, would not want to run such a risk. In Norway, however, we had forced the English to retreat only through the use of Stukas.
When Serrano Suñer for his part pointed again to the great strength of the fortress of Gibraltar, the Fuehrer replied that an attack with heavy artillery against an establishment of that type would not be as effective as would be an operation with the special weapons used in overwhelming the Maginot Line. Heavy aerial bombs had an effect many times as great as the heaviest artillery and even the works of the Maginot Line could not stand up under it, since armored structures which according to World War experience could withstand the heaviest artillery, had been annihilated by 1,000-, 1,400- and 1,800-kilogram aerial bombs inside of ten minutes. Even when there was no direct hit, the concussion effect of a 1,000-kilogram bomb was in itself tremendous. Therefore, the decisive factor for the conquest and later defense of Gibraltar is the guaranteeing of absolute air supremacy.
To be sure, we had set up heavy artillery on the Channel coast; it was however intended only for very bad weather when penetration by air attacks upon the enemy positions was completely out of the question. Aside from that the installation of 38-centimeter guns lasts several months. Already in the middle of July we had installed the batteries erected in the vicinity of Calais.
The superiority of the Stukas as compared to the heavy artillery is shown by the following figures: A great long-barreled gun could fire 200 rounds without repair, while a Stuka squadron of 36 machines in use thrice daily could drop 120 bombs of 1,000 kilograms each, every one of which contained the appropriate amount of high-powered explosives, while a 38-centimeter shell contained only 70 to 75 kilograms of explosives.
It (was a sure thing that one could not long resist the attack of a)  dive-bombing group of Junkers 88's and that, at the approach of this feared opponent, the English fleet would immediately get away from Gibraltar and from the entire vicinity.
The Fuehrer declared further that it would not be possible to provide 38-centimeter guns for Gibraltar. Even the transporting would involve extraordinary difficulties, and the installation would require three to four months. Germany could, however, make special artillery available for the Gibraltar undertaking. Moreover, it was clear that Germany would do everything in her power to help Spain. For once Spain entered the war, Germany would have every interest in her success, since indeed a Spanish victory would be a German one at the same time.
In the Gibraltar undertaking, it would be primarily a matter of taking the fortress itself with extraordinary speed and protecting the Straits.
Serrano Suñer thanked the Fuehrer and pointed out that in the previous discussions which had taken place on this subject between German military experts, among others General von Richthofen, and Admiral Canaris, and General Franco, the German intentions had not clearly come to light, indeed, quite on the contrary a certain confusion had arisen. Because of the Fuehrer's statements, the military possibilities had appeared in an entirely new light. He was asking the Fuehrer whether he was ready to put down in writing the views just expressed so that he could convey them to General Franco on his return.
The Fuehrer promised this and emphasized that the question of the capture of Gibraltar had already been studied exactingly by the Germans. For example, a commission of German front-line officers who had had a leading part in the conquest of important French and Belgian fortifications, like Fort Eben Emael and the Maginot Line, had gone to Spain in order to examine the question on the spot. On the basis of the impressions of this commission as well as of the particulars about the condition of Gibraltar which Germany had possessed from former times or obtained recently through Admiral Canaris they had come to the conclusion that Gibraltar could be conquered by a modern attack with relatively modest means. It was a matter of methods which Germany had already used so successfully in the west. Gibraltar was definitely less capable of resistance than the fortifications in the west. (Casemated)  guns could be silenced more easily than perchance the guns of the Maginot Line which were installed in armored cupolas, and the exposed artillery of Gibraltar could be overwhelmed even more easily. The military cooperation of Germany in the Spanish war would consist of:
1. immediately expelling enemy ships from the Straits, and
2. making available a small troop of specialists with special weapons by whom Gibraltar could be quickly overwhelmed without great sacrifice of blood. This would be a matter of a small selected special troop of assault engineers equipped with special armor-destroying guns-the so-called "Scharten" or "Pillbox-crackers." As soon as Gibraltar was taken, the problem of the Mediterranean would therewith be settled and no serious danger from French Morocco either could any longer threaten.
In the further course of the conversation, Serrano Suñer, in the same fashion as in his conference with the Reichs Foreign Minister again criticized a few Spanish diplomats. In Berlin, Spain had unfortunately been represented by an Ambassador too old and too liberal-minded, but the Falange had not been able to build up the necessary young forces fast enough to fill the posts important in foreign policy with the right people. The Fuehrer replied that he had great appreciation of this difficulty for Germany also in certain instances in 1934 still had representatives abroad with the spirit of 1932.
Suñer seized upon this remark and said that Germany in fact had not always been well represented in Salamanca also. Sometimes it was a matter of Germans who, to be sure, spoke Spanish because they had formerly lived in South America, but who had had no idea of the actual Spanish problems and of the Spanish spiritual sphere.
In the further course of the conversation, Serrano Suñer came to speak about Morocco, and justified the Spanish claims for it in a manner similar to that in the conversation with the Reichs Foreign Minister. He characterized Morocco as Spain's Lebensraum and as her natural expansion objective. For reasons of domestic strengthening of the regime and of external security, Spain was raising the known territorial demands.
The Fuehrer agreed with him in the last point with the remark that many a domestic difficulty which Spain at the moment perhaps still had to face could quickly and easily be overcome by successes with foreign policy. This was an old historical experience. Moreover, it was a matter of two questions:
1. of the problem of the war, which essentially was a military question, and
2. of the future configuration of the relationships in Europe and Africa.
Here Germany on the one hand had economic interests-she wanted to buy raw materials and sell finished manufactured goods-and on the other hand there was the problem of security for her African future in Central Africa. For under (certain) conditions, a great danger could threaten her possessions there and even the whole New Order as well. It was not out of the question that England and France would try to entice America to the Azores and in these efforts find support in certain imperialistic tendencies of America now already coming to the fore. England could in this way gain a foothold in the islands stretching out in front of Africa-whereby, in time, a very unpleasant situation would arise. For the Continent would be dependent upon that power which kept the outlying islands occupied, especially if it concerned a power with naval superiority. Now the control of the seas could be exercised neither by Italy! nor by Germany, nor by Spain. Therefore, it was necessary to set up defensive strong points on the islands in good time . . . 
To this, Serrano Suñer remarked that Germany had won the war and could claim the leadership in the New Order. The defense of the European-African area, however, must take place within the framework of a military alliance of the three powers and of a wise policy. The Fuehrer continuing explained the German interests. It was a matter of:
First, to render the northern area free from the blockade;
Second, to create security toward the east for danger always threatened from the east, and Germany was filling a very useful role as the eastern bulwark for Europe; and
Third, to assure Germany a great colonial area, which was not, however, a matter of area for settlement, of which she possessed enough on the European Continent, but instead purely a matter of raw material colonies. 
After a one-hour duration the interview was concluded.SCHMIDT