File No. 832.73/155
The Ambassador in Brazil ( Morgan ) to the Secretary of State
Sir: On March 20, 1917, in despatch No. 878,1 Chargé Benson, in continuation of previous correspondence on the general subject of the success of the Central & South American Telegraph Co. in securing a concession for laying submarine cables along the Brazilian coast, called the Department’s attention to a recent agreement between the Brazilian Government and the Western Telegraph Co. whereby a special uniform rate of three francs per word was authorized on all telegrams to the United States “via Galveston “or “via Colon “in payment of transmission from any station in Brazil, regardless of zones, to Buenos Aires. On March 22, [1917,]2 4 p.m., the Department instructed this Embassy by telegraph (referring to this agreement, which was published in the Official Gazette of February 18, 1917) to express to the Foreign Office the Department’s hope that the Government of Brazil would find a method of modifying the said agreement which amounted practically to a discrimination against telegrams exchanged between the United States and Brazil and, therefore, placed these telegrams in an unfavorable position in contrast to telegrams exchanged between Brazil and other foreign countries.
The correspondence between this office and the Brazilian Government on the subject of this special rate was initiated on March 23, 1917, in a note which embodied the Department’s instructions. On July 17, 1917, the Foreign Office wrote the Embassy that, according to the information furnished to the Minister of Public Works by the Director General of Telegraphs (a copy of which was attached), [Page 73] telegrams exchanged between Brazil and the United States were not placed in a disadvantageous position, because a new route, via the Pacific, had been opened to them at a rate which was lower than that at first demanded by the Western Telegraph Co.
Since this reply was unsatisfactory, I was constrained to address another note to the Foreign Office, to which an answer was received on January 4, 1918, accompanied by a long report from the Director General of Telegraphs to the Minister of Public Works.
Like its predecessor, this report contained lengthy arguments which, however, by no means destroyed the contention that the measure adopted amounted to a discrimination against American interests, and I felt it my duty to contest the allegations made by the Director General of Telegraphs, which I did in a further note to the Minister for Foreign Affairs.
During all this correspondence, which has been supplemented by a number of conversations, the Ministry of Foreign Affairs has taken no initiative in the matter, but has invariably referred the question to the Minister of Public Works, although the subject matter is one which directly interests relations between the two countries.
From the various reports made by the Director General of Telegraphs, it is evident that he has made a strong though unavailing attempt to justify the action for which he is directly responsible.
However, the last note received from the Ministry for Foreign Affairs, under date of June 25, 1918, contains a final report from the Director General of Telegraphs in which he confesses that the rate in question is a prohibitive one, but that the Brazilian Government is impotent to oblige the Western Telegraph Co. to modify it except by canceling the company’s franchise to operate in Brazil, which action is obviously too extreme a measure to be adopted for the correction of the offense committed.
The service from the United States to Brazil, via the Pacific Coast, is superior to that via London, but the surtax of approximately 25 cents, U. S. gold, per word, between Brazil and Buenos Aires, forces senders to transmit their messages via England, where they are subject to British censorship with its diverse inconveniences for American interests.
If this discrimination rate is to be removed, a strong position will have to be taken by the Department when the new Federal administration takes office in November.
I have [etc.]