The Chargé in Cuba ( White ) to the Secretary of State
[Received August 18.]
Sir: Referring to my despatches (Nos. 200 and 202) of June 18th67 and June 19th respectively, in regard to the concessions asked for by the All America Cables Company, Incorporated, I have the honor to enclose, herewith, copies of the Official Gazette of the 2nd [Page 62] instant in which were published presidential decrees Nos. 1197, 1200, 1201 and 1202, granting the four concessions requested by Mr. Strahan on behalf of the above mentioned company.
The first two concessions are for cables from Habana to Mexico or some point in Central America to be determined by the Company, and to connect from there with the Company’s cables to the west coast of South America, and from Habana to New York.
These concessions follow rather closely those granted by the Cuban Government to the Western Union Telegraph Company and to the Commercial Cable Company, with one important exception, namely:—that Article 9 of both concessions stipulates that work should be begun, totally or partially, within a period of five years. Mr. Strahan was afraid that if a new Government should come into power after the next elections it might abrogate the concessions granted by the present Government especially if the work had not been begun on them, and, as explained in my despatch first above mentioned, work cannot be begun for a minimum of three years due to the shortage and difficulty of procuring cable making material. Mr. Strahan thought that by putting in a time limit under which the work should be commenced it would act as an offset to the abrogation of the concession for at least the period stipulated in Article 9 of these concessions.
The last two concessions are for cables from Santiago de Cuba to Guantanamo Bay, and from Guantanamo to Habana, with the privilege of establishing connections or sub-stations in any or all of the following places:—Baracoa; Nipe or Antilla; Gibara; Nuevitas or Tarafa; Puerto Padre; San Fernando or Moron; Caibarien; Sagua La Grande or Isabela; Cardenas and Matanzas.
There was some difficulty at first for the Government and Mr. Strahan to come to an agreement in regard to the terms of these last two concessions. The Government wished to stipulate that the rates would have to be at least three times as great as those in force on the Government-owned land-lines. The Director General of Communications was afraid that there would be competition with resulting loss in the income from the land-lines and hence wished to charge prohibitive rates. Mr. Strahan told me that this tariff would be of such a prohibitive nature as to cause his Company to throw over the concession; he pointed out that it would be several years at best before this line could be made to pay. The Government also wished to prevent the Habana and New York cable from transmitting any messages from other points in Cuba other than Habana, which would mean that messages from Caibarien, for instance, could not be forwarded to New York by the All America Cables but would have to be turned over to one of their competitors. I pointed out to the Secretary of the Interior the injustice of these demands and also [Page 63] called to his attention, the advantage, for the Cuban Government, to have an independent means of communication with the eastern end of the Island and intermediate points, if communication by the land-lines should, through political disturbances or other causes, be interrupted; also the advantage to the cities on the north coast, from the point of view of their commercial development, to have direct cable connection with New York and Central and South America. Colonel Hernandez agreed finally that the Government would ask the Company to charge no higher rates than those charged by the Government owned land-lines, and this stipulation was embodied in Articles 9 and 10 respectively of the last two concessions.
Mr. Strahan appears to have left Habana immediately after the concession was granted and the Legation, therefore, has no further information in regard to his Company’s plans other than what he gave me soon after his arrival in Habana to the effect that his Company is ready to lay immediately the cable from Guantanamo Bay to Santiago de Cuba; and that it will immediately place orders for the other cables which will be laid as soon as these are made, probably within the next three to five years.
I have [etc.]