File No. 832.73/101
The Chargé in Brazil ( Benson) to the Secretary of State
Sir: In continuation of previous correspondence2 on the general subject of the projected extension of American-owned submarine cables to the coast of Brazil (specifically those of the Central & South American Telegraph Co., which it is hoped may soon be laid to Rio de Janeiro and to Santos from Buenos Aires), I now have the honor to report … recent developments in the matter under consideration have resulted in bringing about the following situation:
Every legal impediment to the granting of the desired cable concession by the Government of Brazil to the Central & South American Telegraph Co. has now been removed as a direct result of the company’s continuous and untiring efforts extending over a number of years.
The Western Telegraph Co. has been legally defeated on the merits of the case, and will leave no stone unturned in its evident determination to prevent, if possible, the landing of American cables on the coast of Brazil.
The American company will naturally continue to seek support and aid through the good offices of this Embassy whenever an opportune moment may develop itself, and I trust that this mission may be permitted to continue in its previous policy of supporting and furthering the aims of that company.
When it became evident that the Brazilian Government would be obliged (as a result of representations by the Central & South American Telegraph Co., which were supported by intelligent editorial propaganda in the local press) to force the Western Telegraph Co., in view of the international regulations, to accept messages addressed to the United States via Galveston or via Colon, the Western was successful in negotiating with the Government an agreement whereby a “special, uniform” rate of three francs per word shall be collected on all such telegrams to the United States in payment for transmission from any station in Brazil (regardless of zones) to Buenos Aires.
[Page 46]Ordinarily, in so far as concerns the transmission of telegrams from this country to Buenos Aires, Brazil is divided into two zones, north and south. The southern zone embraces the Federal Capital, the States of Rio de Janeiro and São Paulo, and all territory to the south thereof; and the northern zone, all territory to the north. The southern zone furnishes fully 80 per cent of all the foreign traffic.
The normal rates in force over the Western’s cables to Buenos Aires are fr. 1.75 per word on all service originating in the southern zone of Brazil, and fr. 2.75 when originating in the northern zone. These original normal rates (fr. 1.75 and fr. 2.75) between Brazil and Buenos Aires will, in accordance with the new agreement referred to, be applied to all telegrams to any American republic south of Mexico. On the other hand, the “special, uniform” rate of three francs per word will be applied to all messages addressed to any point in North America, i. e., the United States, Canada, and Mexico.
Thus, the mere fact that a telegram is addressed to the United States, or to Canada, or to Mexico, and not to some South or Central American country, will incur upon the sender, thereof the burden of a surtax of fr. 1.25, or 25 centimes per word, depending upon whether the messages originate in the southern or the northern zone of Brazil.
It must be borne in mind that, in any event, the service performed by the Western Telegraph Co. or by the Brazilian Department of Telegraphs (or by both in conjunction, when the messages pass over the lines of the two administrations) is precisely the same, whether messages be addressed to the United States or to any other country.
This measure, recently adopted, which will go into effect on April 1, 1917, would appear to present a clear case of discrimination against American interests. If this new rate of three francs per word were to be applied to all messages originating in Brazil and addressed to points beyond Buenos Aires, the treatment accorded to each and every country of the two continents would be equal, and no specific cause for complaint could be found, except that of considering the measure as a rather erratic arrangement.
I have [etc.]