File No. 832.73/120
The Vice President of the Central & South American Telegraph Co. ( John L. Merrill) to the Secretary of State
Sir: I thank you for your letter of October 31, 1917,1 with the information that you have received from the American Ambassador at Rio de Janeiro a telegram dated October 25, 1917, stating that [Page 51] permission, without monopoly, to lay cables between Para and the Barbados and between Ascension Island and Rio de Janeiro has been given to the Western Telegraph Co. (British) by a decree signed by the President of Brazil.
In response, permit me to say that we consider that these further concessions by the Republic of Brazil to British-owned and British-controlled cable interests are of extreme importance at this time and are conclusive evidence of the earnest endeavors being made by Great Britain for British commercial supremacy in South America after the war.
Through conversations which I have been privileged to have with you, Mr. Secretary, I am convinced that you fully realize the entire situation and, likewise, the important part our American-owned and American-controlled cables to Brazil will play in the future, not only to our own Government but to both the American and Brazilian commercial interests. The strategic value of cables is realized at this time as never before but we rejoice to know that you appreciate their commercial importance also and the urgent necessity to do everything possible now and hereafter to safeguard American commercial supremacy in Central and South America.
As you know, this company is doing everything possible to enhance that supremacy. We have given to all the Americas a cable service second to none throughout the world and, as I told you recently, just as soon as conditions will permit us to purchase the necessary cable we shall make the extensions and betterments we have so long had in mind, and which have been made possible by the good offices you have so kindly extended.
We are awaiting advice from our agent in Rio de Janeiro in regard to the details of the Western Telegraph Co.’s plans to lay cables between Para and the Barbados. It is extremely doubtful whether such an extension would be profitable unless these British cables could in some way be connected with the United States, either by a further extension (from the Barbados) or by some sort of a traffic agreement with a cable company operating lines from the United States. I fear the latter arrangement would be a decidedly objectionable proposition to you and to the American merchant. American cablegrams handed over to a British-owned and a British-controlled cable would not be conducive to the promotion of American commercial supremacy in Brazil.
You are well aware of the many obstacles which the Western Telegraph Co. (British) has continually put in the way of the American cabling public. Through an intentional avoidance of cooperation with us, this British company has obliged the American and Brazilian merchant who desires to cable to and from Brazil via our American-owned lines to pay an unjust and discriminatory rate (the equivalent of 58 cents per word from Buenos Aires to Rio de Janeiro as against the public rate of 34 cents per word). The object of this discrimination is, of course, to compel the routing of such traffic via England.
You are equally well aware of the trouble we have had in American telegrams, destined for Montevideo in Uruguay.
We have made inquiry, also, in regard to the details of the Western Telegraph Co.’s proposed connection between Rio de Janeiro and the island of Ascension.
[Page 52]In conclusion, I am pleased to be able to inform you that this company has received a telegram from its agent in Rio de Janeiro, dated Rio de Janeiro, November 5, 1917, saying: “Contract finally signed but dated October 27. Mailing you, second, copy concession and translation.”
I do not know just what our agent means when he says “but dated October 27.” I assume that he means the contract was signed on November 5, although dated October 27.
This would seem to close the matter of our proposed extensions from Buenos Aires to the cities of Rio de Janeiro and Santos and, again, I beg to thank you in the name of the Central & South American Telegraph Co. for the good offices which you have so zealously and courteously extended in our behalf and, through you, the American Ambassador to Brazil.
I am [etc.]
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