 Franco had the edge on resupply as the Nationalists now controlled the efficiently run industrial might in the Basque Country.The Republican Government, however, had to leave the armament industry in Catalonia in the hands of the Anarchists.One Anarchist observer reported that "Notwithstanding lavish expenditures of money on this need, our industrial organization was not able to finish a single kind of rifle or machine gun or cannon..." Franco's act of retaking Teruel was a bitter blow to the Republic after the high hopes engendered by its capture.