832.73/170a: Telegram

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

This Government is reliably informed that the Central and South American Telegraph Company, a corporation controlled and directed by prominent American citizens of good standing, has encountered and is still encountering serious obstacles in its earnest efforts to secure, and put into effect, non-exclusive rights to connect Brazil by cable with the Argentine Republic and Cuba, thereby insuring to the Brazilian and American Governments, commerce and public, more direct and competitive communications by cable.

The long legal struggle of the Central and South American Telegraph Company to enter Brazil terminated, this Government understands, in 1917, with an eleven to one decision of the Brazilian Supreme Court, confirming the contract concession granted in 1917 to the Central and South American Telegraph Company.2 Since that time, however, as this Government is informed, opposition to the carrying out of said contract pursuant to the terms of said decision has been persistently shown by minor officials of the Brazilian Government, particularly in the refusal of the Tribunal de Contas to register said contract on the ground that the Central and [Page 194] South American Telegraph Company is not authorized to do business in Brazil and also because of the duties exemption clause 23 of said contract. The company is taking the necessary steps to secure the authorization to do business and is ready and willing to comply with any other technicalities, and entirely disposed, if necessary, for the rapid advancement of its entry into Brazil, to waive all exemption of customs duties.

The contract concession for cables from Brazil to Cuba, granted to Frank Carney,3 in representation of the Central and South American Telegraph Company, is also being subjected to the same hostile treatment and a petition for a similar contract concession from Brazil to Uruguay has been recently rejected by the Brazilian General Direction of Telegraphs.

While this Government has made no exhaustive investigation of the legal status of the rights granted to, or asked for, by the Central and South American Telegraph Company, it has a lively interest in this undertaking to facilitate and extend cable communications between our two countries.

This Government confidently believes that the Brazilian Government participates in this Government’s desire to further the mutual interests of the two Republics by encouraging this and any other additional means of communication, and that once attention of the Brazilian Government is fixed on the importance of the plans of the Central and South American Telegraph Company, the Brazilian Government will do everything in its power to aid in the realization of those plans.

You will, therefore, seek the earliest opportunity to bring the foregoing to the attention of the Brazilian Government, and urge the earliest possible clearing away of the difficulties and obstacles mentioned and any others which may arise to obstruct the legitimate plans of the company mentioned.

Confidential. Please mention to Da Gama4 my personal hope that this matter be [speedily settled].

  1. Ibid., p. 52.
  2. See p. 199; see also Foreign Relations, 1918, p. 74.
  3. Brazilian Minister for Foreign Affairs.