Did the Allies try to "bribe" Franco to join them in World War II?

Stick and carrot to keep Spain "friendly neutral"

To understand situation with Spain, we must first understand Franco and his motivation. Franco was Spanish nationalist, but not firmly beholden to any ideology. Franco put Spanish interests at first place. And for him, Spanish interests were primarily to rebuild country after devastating civil war, to make it and keep it united, and to avoid further unnecessary sacrifices. Franco was against communists, socialists and leftists of all kind, but only because he saw them as a cancerous influence and deadly for Spain.

With this in mind, we could easily understand Spanish moves during WW2. Franco welly well understood naval power of British and latter Americans, and its influence on Spanish maritime trade. He also understood German ground power, especially after fall of France. Therefore, he didn't outright rebuff German demands to join war, but issued a list of impossible demands, knowing full well that Germans could not accommodate him with fuel, food and even arms they lacked themselves. On the other hand, he would gladly have them eliminate Soviets (which did intervene in Spanish civil war at the side of his enemies) and even sent some volunteers in the form of Blue Division. At the same time, he found a lot of common ground with conservatives in Britain and latter in US. He found no use for Spain to wage war against them, and maintained communication with Churchill and other British figures throughout the war.

Now, from the Allied perspective and considering Spain, there were three defining moments. These are late 1940 after fall of France, second half of 1941 after the start of Barbarossa, and late 1943 especially after the capitulation of Italy. First was in a time when Britain stood alone and Spanish could join Axis to capture Gibraltar and act further in Africa. Second was in a time when many minor Axis power joined Germany and declared war on Soviet Union (and later by extension joined war against Britain and US) . Finally, later in the war and before invasion of France in 1944, there was a question how to keep Spain politically as far as possible from Germany, without Germans invading Spain. Question of German occupation of Spain was one of the main concerns for Allies. Theoretically, even if Spain joined Allies, they would likely become a burden and troops would have to be diverted to defend them. Due to the distance and terrain (Pyrenees in particular) Spain is not a good place to start invasion of Germany. On the other hand, Allies could not simply let Germans take it, because of Spanish ports (perspective submarine bases) and Spanish ore (wolfram in particular) .

In first part of the war, Allies definitely used carrot approach towards Spain. Churchill ordered millions of pounds to be paid to Spain. It is now alleged that this money went as bribes to Franco's generals (not Franco himself) but this is highly unlikely. More likely is the version that money went to state treasury - it would be difficult to keep bribes of so large magnitude unknown to Franco and his security apparatus. Stick begun to be applied only latter when Allied position and power improved. For example, with US entry into war, oil and other supplies were restricted to ten week reserve. There was increasing pressure to stop exports of wolfram to Germany and to withdraw forces from Eastern Front. Pressure increased in spring of 1944 to the point that Allies threatened complete blockade of Spain. At that point, German invasion of Spain was unlikely, and also Spanish entry in the war on losing Axis side. Therefore consideration for Spanish position was lessened, and they were presented with an ultimatum. Nevertheless, Churchill did give a positive note about them in House of Commons when Spain practically cut their exports to Germany.

It is interesting to note that after WW2 there was a talk about intervening in Spain and toppling Franco's regime. In both Britain and France in 1946 more left-leaning parties came to power. France closed border with Spain, UN refused to let them join etc ...France even issued a note to Britain and UK calling for formation of Spanish provisional government in exile. Of course, Soviet Union was traditionally hostile. But, do the war weariness and lot of economic problems in post-war world, this idea was not seriously entertained. As communism became main enemy of the West, view of Spain gradually improved and Franco kept ruling until his death.

Short Answer

Not only is there no evidence that the Allies tried to 'bribe' Spain to declare war on the Axis, there is strong evidence that the Allies knew any such attempt would be futile for several reasons, not least among which were ideological issues and especially the extreme dislike that the ruling Spanish Falangists had for the Soviet Union.

Further, as Hitler had been unable to bring Spain into the Axis despite their ideological ties, Britain and America realistically had no chance of doing so. Also, a neutral Spain was advantageous to the Allies in that it lessened the likelihood of a German invasion of the Iberian peninsula, which would have posed a severe threat to Gibraltar (see also Why was Operation Felix cancelled?), as well as threatening neutral Portugal.

In 1945, there was an 'offer' (or rather, condition) that countries could not become members of the new United Nations unless they declared war on one or more Axis powers by March 1st, 1945 but, in Spain's case, this offer did not apply. Not until the very end of the war in Europe did Franco consider declaring war on an Axis power (Japan - details below); in the end, though, Spain remained neutral as the Allies made it clear that there was nothing for Spain to gain from declaring war on an Axis power so late in the war.

Details

Prior to the German invasion of the Soviet Union in June 1941, Britain and her empire were strong enough to keep Spain out of the war (by threatening to throttle the Spanish economy and invade the Canary Islands), but not strong enough even to force Franco away from a policy of pro-Axis neutrality (never mind to actually induce her to join Britain). Further, it was essential not to give Germany any compelling reason for invading Spain as

At the end of June 1940 German tanks had reached the border between France and Spain. Many in the British government thought the Germans had an open road to Gibraltar....

Source: Jerrold Michael Packard, 'The European neutrals in World War II' (thesis, 1989)

In addition, (thanks here to Pieter Geerkens for his comment) Portugal and Spain were keeping each other neutral through a series of treaties. Thus, even though Portugal was a long-term ally of Britain, the Portuguese remained neutral in WWII as it would not benefit the Allies if this balance on the Iberian peninsula were disturbed to the extent that Germany decided to intervene militarily.

The Allies were also aware that, following the Spanish Civil War, Franco's Spain was economically weak and thus reluctant to involve itself militarily on either side. This weakness also potentially made Spain both an easier target for invasion for Hitler and a weak ally for Britain and America. Thus,

The United States and Britain joined in a continuing effort to keep Franco’s Spain out of the War by providing essential exports like gasoline and grain to prop up the Spanish economy, which had been in a state of collapse since the end of the Spanish Civil War.

Source: Allied Relations and Negotiations With Spain

Following the German invasion of the Soviet Union, the ideological hatred that the Falangists had for the Soviets made it even less likely that Franco's regime would join the Allies. In fact, it led to the formation of the Blue Division, a volunteer force to fight the Soviets:

Recruiting began with a massive demonstration in central Madrid, during which Serrano declared that “Russia is guilty” of beginning the Spanish Civil War, murdering José Antonio, and otherwise contributing to the destruction of Spain’s economy and prospects. Tens of thousands of Falangists, university students, soldiers, and others wanted to join the unit...

Source: Wayne H. Bowen, 'Spain during World War II' (2006)

As far as Stalin was concerned, the feeling of hatred was mutual and America's subsequent entry in to the war did nothing to lessen Spanish-Soviet antipathy (although it did eventually help tip Spain towards a less pro-Axis stance. In fact, the possibility of bribing Spain to join the Allies was considered so remote that, at a series of meetings in January 1943,

the allies were prepared, at least on a planning basis, to consider their own invasion of Spain in order to ensure access to the Mediterranean.

Source: Allied Relations and Negotiations With Spain

The closest that Spain came to declaring war on an Axis power came near the end of the war when

...Franco briefly considered joining the Allies. The precipitating event was an attack on Spaniards by Japanese troops evacuating Manila in February 1945.... on February 12, 1945, several hundred Japanese soldiers fired on Madrid’s consulate in Manila, and also set several buildings on fire, in an attempt to strike at the more than one hundred people taking refuge there.

Source: Bowen

As a result,

The Spanish government...immediately withdrew its diplomatic protection over Japanese assets....Spain also lodged a very stern diplomatic protest at the Japanese embassy in Madrid, demanding moral and financial satisfaction for the crimes committed against Spanish citizens and property....Japan did not have answers for Spain, and so on April 12, Franco broke diplomatic relations between the two nations...

Source: Bowen

However, the British and American ambassadors in Madrid made it clear to the Spanish government that a declaration of war would not have any benefits for Spain. Further,

Franco decided against entering the war at this moment because he did not want to become an ally of the hated Soviet Union, expected to enter the military conflict against Japan soon after the German surrender.

Source: Bowen