File No. 832.73/127

The Ambassador in Brazil ( Morgan) to the Secretary of State

No. 1066

Sir: Referring to the subject of my telegram of October 25, 4 p.m., I have the honor to enclose a translation of decree No. 12,688, of the 24th of October, which was published in the Official Gazette of the Brazilian Government on the 24th of November last, by which the Western Telegraph Co., Ltd., a British corporation, which has operated submarine cables between Europe and Brazil for many years, was given permission to land an additional cable on the Brazilian coast which will connect the city of Rio de Janeiro with Ascension Island. The same decree gave that company also the right to lay a submarine cable between the city of Belem, Para, and the island of Barbados.

These concessions are without monopoly and that relating to the cable between Belem and Barbados must not infringe the rights granted the French Cable Co. by decree No. 216 of the 22d of February 1890.

The Western Telegraph Co., Ltd., already has a submarine cable between Buenos Aires and Ascension Island. The new cable which it proposes to lay between Rio de Janeiro and that island will have the effect of relieving the traffic from Buenos Aires to Europe and of facilitating the transmission of messages between Brazil and Europe which at present pass over the cables of the Western Company which enter the sea at Pernambuco.

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The Western Telegraph Co., Ltd., intends to continue the cable from Para to Barbados, to Bermuda and Nova Scotia. It may be prevented from doing so, however, if the French Cable Co. substantiates its protest, a translation of which forms the second enclosure to this despatch,1 in which objection is taken to the Para-Barbados line on the ground that it infringes the privileges secured under the third clause of decree No. 216 of 1890 for submarine communication between Brazil and North America. Should the Western Union Telegraph Co. decide to apply for a concession to lay cables between Brazil and one of the Antilles the Western Telegraph Co. and itself would have a similar interest in defeating this protest.

I have [etc.]

Edwin V. Morgan
[Enclosure—Translation]

Decree granting a concession to the Western Telegraph Co., Ltd., for a submarine cable from Rio de Janeiro to the island of Ascension, and another cable from Para to the island of Barbados

Decree No. 12,688 of the 24th of October, 1917: Granting to the Western Telegraph Co., Ltd., permission to lay, land on the coast of Brazil, maintain and operate a submarine telegraph cable, connecting the city of Rio de Janeiro to Ascension Island, in Africa, and also a telegraph cable connecting the city of Belem in Para to the island of Barbados.

The President of the Republic of the United States of Brazil, in attention to the request made by the Western Telegraph Co., Ltd., decrees:

Sole article: Permission is hereby granted to the Western Telegraph Co., Ltd., to lay, land on the coast of Brazil, maintain and operate a telegraph cable connecting the city of Rio de Janeiro to Ascension Island, in Africa, and also—with due reserve of such rights as may be vested in other companies under previous concessions—a telegraph cable connecting the city of Belem in Para to the island of Barbados, without any kind of privilege or monopoly or Government subvention, and subject to the clauses hereunto attached under the signature of the Minister of State for the Affairs of Roads and Public Works.

Rio de Janeiro, October 24, 1917, 96th of the Independence and 29th of the Republic.

Wensceslau Braz P. Gomes
Augusto Tavares de Lyra

Clauses Referred to in Decree No. 12,688 of this Date

I

Permission is hereby granted to the Western Telegraph Co., Ltd., to lay, land on the coast of Brazil, maintain and operate a telegraph cable connecting the city of Rio de Janeiro to Ascension Island, in Africa, and also a telegraph cable connecting the city of Belem in Para to the island of Barbados, where they shall link themselves to the international telegraph systems landing on those islands; provided always the permission hereby granted shall not constitute a privilege or a monopoly of any sort in favor of the contracting company, and that the Government of the United States of Brazil shall retain complete freedom of action to grant, as it may deem fit, a similar permission to any enterprise entering an application therefor.

II

The landing point of the Ascension line shall be at Copacabana Beach in the city of Rio de Janeiro, whence it shall be extended to the company’s station in the business part of the city by means of submarine cables laid out in the Bay of Guanabara or by means of underground conductors and the company shall have the power, when found convenient or necessary, to adopt the two systems or their combination.

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III

The Barbados cable shall be landed in the city of Belem in Para or in the neighborhood thereof, with due reserve in respect of such rights as may be vested in other companies under previous concessions, and the contracting party shall, as in the case of the Ascension line, have the power to connect the landing point to their station by means of underground or underwater conductors or a combination of the two.

IV

The lines referred to in the preceding clauses must be in regular operation within the delay of five years as from the date of signing the contract, cases of force majeure always excepted, provided they are satisfactorily explained; and the plans of the landing points and the routes of the lines proposed to link up such points with the stations of the company at Rio de Janeiro and Para (Belem) shall be submitted to the Government for approval not less than 60 days previous to the date of laying such linking lines.

Sole paragraph: The delay stipulated in the present clause may be extended one or more times at the discretion of the Government.

V

The company shall have the power to install their stations in private buildings, owned by the company or by others, but such stations shall at all events be connected to the Government stations by means of pneumatic tube system (or any other more approved system) in order to permit the greatest possible expediency in the exchange of correspondence.

VI

The tariffs shall be organized by the company and submitted to the Government for approval, and the rates (which shall be made payable in paper currency) shall not be higher than the rates charged by similar companies operating in the country at the present time.

Sole paragraph: The approved rates if eventually reduced shall not be increased again without the authorization of the Government.

VII

Terminal and transit rates to be carried to the debit of the company in respect of international combined traffic service shall be the same as those in force for combined service with the remaining cable companies operating in the country.

VIII

The company undertakes to pay to the Government a contribution of ten centimes of a franc per word of international messages carried by the cables referred to in clause 1.

Sole paragraph: This contribution shall be reduced to five centimes of a franc per word in respect of service messages of the Brazilian Government, press messages and deferred messages.

IX

The company is held under the obligation to establish combined service with the Government lines in respect of the service received from or addressed to the stations of the Union excepting such service as may be relative to the cities of Rio de Janeiro and Belem in Para and the route indicated by the expediter shall in every instance be observed.

Sole paragraph: The rates to be established in the combined service agreement between the Government and the company shall be equal to those existing in contracts in force made with the companies of like nature operating in the country at the present time.

X

The company shall have the power to receive from the public such telegrams as shall be tendered for transmission and to collect the rates thereon, and also to deliver at their respective addresses such messages as shall be received during the period within which the said company hold the right so to do under their concessions prior to the date of the decree granting the present one.

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XI

The company undertakes to maintain their cables in a condition capable of assuring proper service to the traffic and must notify the Government within a period of not more than 48 hours of all and any occurrence occasioning or which may eventually occasion an interruption of the service.

XII

The company shall not have the power to amalgamate or to enter into any combination or convention with any other company of the same nature operating in Brazil unless they shall have previously obtained the consent of the Government.

Sole paragraph: Such telegrams as by virtue of indication of route shall have to be exchanged with other companies operating in the country shall be exchanged through the stations of the Department General of Telegraphs in Rio de Janeiro and in Belem in Para and the adjustment of accounts relative to such service shall be conducted through those stations and in this case the concessionaire shall pay them one franc per telegram as an indemnity for the expense in office work.

XIII

Accounts shall be adjusted with the Department General of Telegraphs quarterly and the amount owing shall be settled within the quarter next following that to which the adjustment refers.

XIV

The company is held under the obligation to adhere to the telegraphic convention of St. Petersburg in accordance with the international regulations issued in conformity with the same and shall enjoy the benefits resulting from the convention.

XV

The Government shall supervise as it may deem convenient all the service of the company in Brazil.

XVI

The telegrams of the Government of Brazil shall be transmitted preferentially and shall benefit of a reduction of 50 per cent of the company’s own rates.

XVII

The following shall be transmitted free of charge:

(1)
Telegrams (of not more than 20 words each) sent by the Government of Brazil or by the agents thereof from South or North America notifying the appearance of some epidemic disease in the country whence they are sent or in the neighboring countries, or such other facts as may constitute a notorious public calamity;
(2)
Two telegrams daily (one in each direction) between the observatory at Rio de Janeiro and one observatory in North America, and the Government shall pay for the words in excess of the number of twenty in each telegram at the rates for official telegrams.

XVIII

The company shall contribute towards the expenses with the supervision a sum of twelve contos of reis (rs. 12:000$000) in paper currency, per annum, payable by half-yearly instalments in advance into the National Treasury.

XIX

The company undertake to maintain in Rio de Janeiro a representative vested with full powers to treat and decide in a definite manner all questions that may arise in the country in respect of the company or their staff, and the said representative shall be empowered to receive initial summons and such other summons in respect of which the law requires special powers.

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XX

In case of temporary cessation of the service in the cases provided for in Article 8 of the telegraph convention of St. Petersburg, no indemnity whatever shall be paid to the company, however long it may last.

XXI

The present concession is considered to be independent from the other concessions exploited by the company.

XXII

The company shall enjoy the favors granted to other companies and enterprises of like nature operating in the country, excepting such as may relate to material to be imported for the installation of their service, on which a tax of 5 per cent shall be payable, and such favors as relate to the cable ships, which shall enjoy the privileges of national ships.

However, upon their stations being installed, the company shall be liable for payment of customhouse duties on such material as they shall import for the maintenance and operation of the service under their charge.

XXIII

In the event of non-compliance with any one or more of the present clauses, the Government shall have the power to impose upon the company fines ranging between the sums of two hundred milreis and two contos of reis (paper currency), and double the amount in case of recurrence of the offense.

The amount of the fine imposed by the Government shall be paid into the National Treasury not later than thirty days after the date on which it shall have been imposed as published in the Diario Official.

XXIV

The laws of Brazil shall alone be applicable for the purpose of deciding all and any question relative to the present contract, whenever the same shall not be settled by arbitration.

Sole paragraph: In effecting the arbitration, each one of the parties shall nominate one arbitrator and if the latter shall not agree, the matter shall be referred to an umpire whose name shall be drawn by lots among two names submitted by the two parties respectively.

No appeal shall be taken from the decision of the umpire.

XXV

As a security of the fulfilment of the provisions of clause 4, the company shall deposit with the National Treasury prior to the signature of the respective contract the sum of forty contos of reis (rs. 40:000$000) in paper currency without any right to interest, or in Federal Government bonds.

Sole paragraph: Out of this sum of forty contos of reis one half shall be returned to the company six months after the definite inauguration of the traffic of the line between Rio de Janeiro and Ascension, and the remaining half six months after the definite inauguration of the traffic of the line between Belem in Para and Barbados.

Should the delay stipulated in clause 4 be exceeded and fail to be extended by the Government, then the deposit of forty contos of reis shall be forfeited in favor of the Government in respect of twenty contos of reis for the line between Rio de Janeiro [and Ascension] and twenty contos of reis for the line from Belem in Para.

XXVI

The permission referred to in clause 1 may be declared null and void independently of any action or judicial notification and the fact shall not thereby be entitled to any sort of indemnity;

(1)
If, on the expiration of the delay fixed in clause 4, the cables which the company undertake to lay shall not have commenced to operate regularly, cases of force majeure so considered at the discretion of the Government always excepted;
(2)
If telegraphic communications over the cables referred to in clause 1 shall be interrupted during more than six months consecutively, cases of force majeure so considered at the discretion of the Government always excepted;
(3)
If the company shall enter into any combination or convention with an enterprise or company of like nature operating in Brazil without the previous consent of the Government;
(4)
If the company shall fail to pay into the National Treasury in due time the instalments due for supervision in accordance with clause 18.

XXVII

The permission referred to in clause 1 shall become null and void if the company shall refuse to sign the respective contract within thirty days as from the date of publication of the decree approving the present clauses.

A. Tavabes de Lyra

  1. Not printed.