No. 100.
Mr. Brulatour to Mr. Frelinghuysen.

No. 571.]

Sir: Mr. Morton, upon receiving your telegraphic instruction to remonstrate against the qualified instruction given to the Commercial Gable Company to land in France, as being in violation of the agreement of 1879, called on Mr. Ferry, to whom he explained the grounds of your formulating objection. With a view of precising the question, and of recalling it distinctly to the president of the council, Mr. Morton addressed to him the next day a written communication, stating again the case as you understood it, and expressing the hope that our friendly representation would be well received.

The reply of Mr. Ferry, dated the 12th, only came to hand on the 15th. It is a mere summary of a note from the minister of posts and telegraphs, Mr. Cochery, which he transmits at the same time.

Mr. Cochery, in this note, touches points not directly at issue, but, with reference to the main question, he confines himself to the statement that the Commercial Cable Company, having no direct communication with France, cannot be assimilated to the French company, and he dismisses the complaint in relation to the right which the Government has reserved to withdraw the privilege granted, upon giving one year’s notice, by simply asserting that this is a “general police right which exists by right in all concessions.”

With the object of not letting Mr. Ferry remain under the impression that so unsatisfactory an answer to our reasonable complaint could be accepted, in acknowledging the receipt of his communication I said that, having no instruction to discuss this matter, I had referred it to you, but explained at the same time my inability to conciliate the position taken by the minister of posts and telegraphs with the plain terms of the agreement of 1879.

The minister of foreign affairs, in his summary of the note of Mr. Cochery, states that the permission given to the Commercial Cable Company to lay a cable across the channel is an exceptional favor which has not been granted heretofore to any other company.

By a contract made in 1859 the French Government has ceded to the Submarine Telegraph Company the monopoly of connecting by cable France with the British Islands.

This monopoly, which expires in 1889, is subject, however, to one exception—the French Government has reserved the right of authorizing the establishment of one line connecting France with Ireland for the exclusive purpose of transmitting dispatches to and from America. This right having never been availed of, the French Government would have really conferred an exceptional favor upon the Commercial Cable Company by transferring it to that company. But this was not done, [Page 152] and the Commercial Company had to purchase from the Submarine Telegraph Company the privilege of laying the cable which will connect France with Ireland, a privilege already conceded for a consideration to the French and English lines. The exceptional favor granted to the Commercial Cable Company consists, therefore, in consenting to make no objection if the Submarine Telegraph Company is willing to make use of its monopoly to the advantage of France.

The minister of foreign affairs states also that the privilege given to the Commercial Cable Company is not limited to 1889, as that given to the other companies. That is true; but its privilege can be suppressed at any time upon one year’s notice being given.

Thus, while the English company secured a lease of twenty years and the French company a lease of ten years when they were organized, the Commercial Cable Company can never be sure of existing more than one year.

In both the French and American concessions the telegraphic rate is limited;’ but if the American company finds it Necessary to reduce its tariff in order to compete with the other lines, it cannot raise it again without an authorization of the Government, an authorization which may be withheld for a certain time and which is not needed by the English company.

Mr. Cochery in his note lays much stress upon the fact that the Commercial cable touches Ireland before reaching the United States, a fact from which he draws the inference that it does not thus connect directly the two countries. Mr. Cochery himself seems to have been of a different opinion when he drew up the conditions upon which the Commercial Cable Company was to receive its privilege, for article 1 of these conditions states that the company is authorized “to land upon a point to be determined a transatlantic cable connecting directly France with North America by touching at an intermediary point in Ireland, and which is to be used exclusively for the transmission of dispatches exchanged with America.”

I inclose herewith copy of the correspondence exchanged in relation to this subject.

I have, &c.,

[Inclosure 1 in No. 571.]

Mr. Morton to Mr. Ferry.

Sir: Referring to the conversation I had the honor of having yesterday with your excellency in relation to the objections my Government had to the conditional authorization granted to the American Commercial Cable Company to land in France, I beg leave to restate here, substantially, the grounds of my complaint.

My Government having granted to the French Telegraph Company permission to land its cables on our shores, upon the condition that the same privilege would be given to any American company applying for it, I requested your excellency on the 3d of January last to give this privilege to the Commercial Company, an American corporation which had already obtained from my Government the necessary facilities. This request was promptly complied with and my Government was no less prompt in acknowledging this action of the French Republic.

It seems, however, that this permission is only a qualified one, as it is understood that the Commercial Company is required to assent to terms by which the part of their line running from France to Ireland may be purchased on a year’s notice. If such is the case, my Government considers this condition as ‘contrary to the first clause of the agreement of 1880, upon which the French Telegraph Company was allowed to land on the shores of the United States, which clause reads as follows:

[Page 153]

“That the company receive no exclusive concession from the Government of France which would exclude any other line which might be formed in the United States from a like privilege of landing on the shores of France and connecting with the inland telegraphic system of that country.”

In instructing me to make proper representations to your excellency in relation to this matter, Mr. Frelinghuysen says, very judiciously—

“If France has a right to affix conditions, she would logically have a right to exclude, which is assuredly contrary to the spirit of the agreement between the two countries.”

I may add that this agreement was also assented to by the French Telegraph Company in a letter to the Secretary of State, dated February 9, 1880, and signed by Mr. Pouyer Quertier. I trust that your excellency will readily acknowledge that these friendly representations are well founded, and that the obnoxious condition above referred to will be dispensed with. Although the Commercial Cable Company might accept the condition indicated, the objection of my Government would nevertheless remain, as it is not made in view of any particular interest, but is one of principle intended to cover all cases.

I avail, &c.,

[Inclosure 2 in No. 571.—Translation.]

Mr. Ferry to Mr. Morton.

Sir: On the 29th of May last you were good enough to communicate to me the objections which appeared to your Government to be called for by the condition imposed upon the Commercial Cable Company by the administration of posts and telegraphs.

Mr. Cochery, to whom I referred your communication, has just forwarded to me the note which you will find hereto annexed.

It appears from this document—

That the cable conceded to the Commercial Cable Company having a landing place in Ireland cannot be assimilated with a direct transatlantic cable.
That it is by a favor, which up to the present time has never been conceded to any other company, that Messrs. Mackay and Bennett obtained the authorization under the reservation of coming to an understanding with the competent parties, to land a telegraphic cable in Ireland.
That the period of the concession is not limited to 1889 like those of all the other cables laid between France and England.
That in consequence the situation of the Commercial Cable Company cannot be assimilated with that of the French company from Paris to New York.

I shall be obliged if you will have the goodness to bring to the knowledge of your -Government the explanation contained in the note of the minister of posts and telegraphs.

Receive, &c.,

[Inclosure 3 in No. 571.—Translation.]

Note from the ministry of posts and telegraphs.

note relative to the commercial cable company.

The observations presented by the legation of the United States appear to have been caused by a misunderstanding. It seems, therefore, necessary to insist upon the difference of the situation which exists between the new concession and the concessions previously accorded.

The latter, in fact, apply to cables connecting directly France and North America, without touching the territory of any other country in their course. It was upon these conditions that the French company from Paris to New York was established, which gave rise on the part of the Government of the United States to the claim of reciprocity recalled by Mr. Morton.

The application of Messrs. Mackay and Bennett is presented under altogether different conditions.

It has for object the establishment between France and Ireland of a cable which will join at Valentia a transatlantic line, of which it will be the tributary. The submarine conductor, commencing at Havre, will not, therefore, constitute a direct communication [Page 154] with America; it will simply be the means of forwarding dispatches from the Contient to the principal cable terminating in Ireland.

In consequence no assimilation can be established between this new concession and that which has been accorded to the French company from Paris to New York.

It was, besides, in consequence of the intervention of the minister of the United States that no objections were raised when the grantees indicated their intention of having a landing place in Ireland.

On the other hand, for the concession of the cable between France and Ireland, the French administration is far from being placed in the identical conditions to those which apply to the transatlantic cables.

In fact, article 3 of the convention, concluded on January 2, 1859, with the Compagnie des Cables de la Manche, grantee of a privilege for the establishment of the cable between France and Great Britain, stipulates only that—

“The French Government reserves to itself the right to authorize, as it may seem fit, the establishment of a telegraphic line commencing at any point upon the coast of France and terminating directly on the coast of Ireland, and intended exclusively for the transmission from or for America by the transatlantic cable.”

As, therefore, it is not admissible that the administration will abandon a unique right, the enjoyment of which it should reserve for its direct necessities, it has only been enabled to grant the authority under a reservation of an understanding between the grantee and the Compagnie des Cables de la Manche.

It was then impossible for it to make a concession under identically the same conditions as those of the other concessions.

Messrs. Mackay and Bennett perfectly understood this, and made no difficulty in accepting, on the 1st of February last, the prepared stipulations (cahier des charges) for their concession.

These stipulations contain a redemption clause destined to fix, if necessary, the duration of the concession to the uniform stated period for all the cables laid across the channel between France and England, that is to say, to 1889.

Moreover, there was a question, for the same motive, of limiting to 1889 the concession granted to Messrs. Mackay and Bennett, and it was upon the application of the grantees that the repurchase clause was substituted for this provision of limitation.

It was under these conditions that an understanding was arrived at in the month of March last, and it was not then the subject of any observation on the part of the Government of the United States.

Since that time the grantees, having allowed the period for regulating their concession to expire, have recently been obliged to apply for the renewal thereof.

The same stipulations were presented to them. They then raised an objection with reference to the right of repurchase. Upon their application this clause was suppressed, and it was simply agreed to add to the conditions the right to terminate the authorization granted by the French Government upon giving notice a year in advance. This is the indication of a general right of police which exists of full right in every concession.

The legation of the United States appears, besides, to contest the right of the French Government of imposing conditions for the concession of the cable.

It is necessary, with reference to this subject, not to lose sight of the difference which exists between the conditions of organization of the telegraphic service in France and in America.

In France the telegraph is submitted in an absolute manner to the monopoly of the state.

In the United States it is freely worked by private industry.

It is clear, then, that, in the latter country it is possible to authorize the establishment of submarine cables without conditions, but it cannot be the same in France, where this manner of proceeding would constitute an infringement upon the monopoly of the state.

[Inclosure 4 in No. 571.]

Mr. Brulatour to Mr. Ferry.

Sir: I have the honor to acknowledge the receipt of your excellency’s note of the 12th instant, transmitting a communication from Mr. Cochery, in reply to the friendly representations Mr. Morton was instructed to make in relation to the qualified authorization given to the Commercial Cable Company to land upon the shores of France.

The objections of the United States Government to the conditions affixed to the permission received by the American Cable Company are of the simplest kind.

[Page 155]

In 1879, my Government gave to the French company the right to land in the United States, upon the distinct understanding and formal agreement that the same privilege would be extended by France to any American company which might apply for it. By its letter, as well as by its spirit, this agreement means reciprocity of treatment for the companies of both nations.

In 1884, the United States applies, in behalf of the American Commercial Company, for the privilege to land in France, and obtains it only upon terms less favorable than those made to the French company and with the conditions that the privilege thus granted can be withdrawn upon giving one year’s notice.

No such conditions haying been imposed upon the French company in the United States, my Government contends that it is in violation of the plain and unequivocal agreement of 1879, and asks that the Commercial Cable Company be treated in France upon exactly the same footing as the French company is treated in the United States.

Mr. Cochery’s note meets this request by the following arguments:

The cable of the Commercial Company does not connect directly France with the United States, and cannot, therefore, be assimilated to the French line.
The right to withdraw the authorization to land upon giving one year’s notice is a general police provision which exists by right in all concessions.

I have no instruction to discuss these arguments thus so unexpectedly opposed to a request which seemed so natural and so fair that the possibility of its being refused was not anticipated, and I can but refer the whole matter to Mr. Frelinghuysen. I may be permitted to say, however, that I utterly fail to see the force of the position taken by the minister of posts and telegraphs. I fail to perceive, as far as the right of landing and the privileges accruing therefrom are concerned that there exists the slightest difference between the American company and the French company. Both were created with the special object of connecting directly France with the United States, and Mr. Cochery himself thus describes the Commercial Cable Company in the specifications (cahier des charges) submitted to Messrs. Mackay and Bennett.

I trust that further examination of this subject will satisfy your excellency that the objections which Mr. Morton was requested to present against the condition imposed on the American company are just and reasonable, and that they will be removed. The Government of the United States, which cannot be charged with having held the French company too strictly to the formal pledge it has taken, has the right to expect that the American company shall also be fairly dealt with.

Your excellency will appeciate whether it is fair and equal treatment to compel this company to submit to terms by which it can be deprived of its privilege at any time, upon a short notice, when no similar condition is to be found in the specifications (cahier des charges) subscribed to by the other companies established for the exclusive transmission of dispatches between the two countries. To limit its existence” to one year is certainly a serious impediment to the safe establishment in France, of the Commercial Cable Company, which would, besides, find itself upon a most unequal and unfavorable footing compared with other companies.

The United States legation does not contest the right of the French Government to affix conditions to any concession it may grant for the establishment of cables; it is also aware that telegraphic lines in France are a Government monopoly, but this cannot assuredly furnish a legitimate motive for discrimination.

After a careful perusal of the terms accorded by the French Government in 1869 to the English company, in 1879 to the French company, and in 1884 to the Commercial Cable Company, I am obliged to say that the latter, instead of receiving in France the treatment which the French company has obtained in the United States, is subjected with respect to the right of landing, as well as to the privilege of connecting its cables with the French land system, to exceptional exigencies prejudicial to its interest.

I avail, &c.,