811.7353b/122
The Ambassador in Great Britain (Harvey) to the Secretary of
State
London, August 19,
1922.
[Received September 1.]
No. 1631
Sir: I have the honor to inform the Department
that, after several oral representations had been made to the Foreign
Office, based on the Department’s cable instructions regarding the
British opposition to the applications of the Western Union Telegraph
Company and the Commercial Telegraph Company for concessions to land and
operate cables at the Azores, it was considered desirable, and the tenor
of the Department’s instructions indicated that it was expected, that a
formal note on the subject be filed with the British Foreign Office.
Such a note was drawn up and submitted to the Foreign Office on July
24th, and supplemented by a personal letter from the Ambassador to Lord
Balfour embodying a portion of the Department’s cable instruction No.
210, of July 17, 4 p.m., 1922. Copies of both communications are
appended hereto.
Formal acknowledgment of the receipt of these communications was duly
made by the Foreign Office (see Telegram No. 329 of August 1, 4
p.m.86), and today
the definite answer has been received, a copy of which likewise is
attached hereto. Briefly summarized, the British note justifies the
British opposition, which it admits, to our interests in the Azores upon
the ground that the establishment in those islands of the American cable
companies concerned would, through consequent competition, further
financially harm the British cable company which has already suffered
heavy financial loss through the refusal of the Department to allow the
landing at Miami of a cable in which it holds part interest. It is
explained that the opposition, however, has for its object the securing
to the British company of the South American traffic. The British
Government
[Page 370]
professes to
believe that, irrespective of the position taken by the Argentine
Government, the requirements set down by the Department regarding the
mutual waiver of the exclusive rights held in South America by the
American and British cable companies have been fulfilled.
The further points discussed in the note apply more especially to matters
hitherto handled at Washington.
I have [etc.]
For the Ambassador:
Post
Wheeler
Counselor of
Embassy[Enclosure 1]
The American Ambassador (Harvey) to the British Acting Secretary of State for
Foreign Affairs (Balfour)
London, July 24,
1922.
No. 313
My Lord: I have the honor to advert to this
Embassy’s recent representations orally made to the Foreign Office
with respect to information received by my Government to the effect
that the British Minister at Lisbon has lent active opposition to
the applications of the Western Union Telegraph Company and the
Commercial Cable Company for concessions to land and operate cables
in the Azores.
As was stated to the Chief of the American Department at the time the
above referred to representations were made, it is a source of keen
disappointment to my Government that the British Government should
oppose the legitimate efforts of American cable companies to obtain
in the Azores cable facilities which are not exclusive and which
would in no way interfere with the exercise by British cable
companies of privileges similar to those sought by the American
companies. My Government cannot reconcile the statements made in the
Foreign Office’s Note A 3166/248/45, of May 16th, 1922,87 that the
British Government intended to continue the practice of granting all
possible facilities in British territory for the development of
international communications, with opposition to the development of
communication facilities in Portuguese territory.
In answer to the oral representations referred to, the Chief of the
American Department of the Foreign Office did not disavow the acts
of the British Minister at Lisbon, but stated that a British cable
company now operating at the Azores had complained that the
introduction of the American companies named would create harmful
[Page 371]
competition, and that
the British Government had been disposed to heed this protest
because the company making it was the same which was suffering great
financial inconvenience through the failure of the Department of
State at Washington to grant it the necessary permit to land its
cable at Miami, Florida. In reply it was pointed out that my
Government could perceive no relation between the efforts of the
American companies to obtain privileges of landing and operating
cables in the Azores and the application of the Western Union to
land at Miami, inasmuch as the United States Government is
withholding from an American company the privilege of establishing
physical connection between the United States and foreign territory,
while the British Government is seeking to interfere with the
freedom of action of the Portuguese Government and is opposing
efforts of American companies to obtain facilities in Portuguese
territory.
The conditions on which the United States Government is willing to
grant license for landing at Miami have been made clear to all
parties concerned, and upon compliance with these conditions the
license will be no longer withheld. These conditions, stated
briefly, are: that the British Western Telegraph Company, the
associate of the American Western Union Telegraph Company in the
Miami–Barbados–Brazil Line, shall effectively surrender its
exclusive privileges in South America, while a similar waiver is
made by the All America Cable Company, the British Company waiving
its exclusive or preferential privileges on the east coast and the
American company its similar privileges on the west coast. It was
further pointed out that the United States Government is cooperating
in the effort of the Western Telegraph Company to readjust its
position in South America to the end that the license for landing at
Miami may issue, which further distinguished the attitude of the
United States Government in the Miami matter from the attitude of
the British Government in the Azores.
However, it was the opinion of the Chief of the American Department
of the Foreign Office that the British Company referred to by the
Department of State had fulfilled its part of the undertaking set up
by the United States Government as prerequisite to the granting of
the landing permit at Miami, and that, therefore, further delay in
granting this permit was deemed unwarranted. The assurance was not
given, however, that the granting of this permit to land at Miami
would result in a cessation of the opposition to the acquisition of
the concessions desired by the American companies in the Azores,
notwithstanding the fact that the position of the United States
Government with respect to the Miami cable was cited as a
contributory cause of the opposition at Lisbon. As further
indicating the attitude of Your Lordship’s Government in
[Page 372]
this matter I observe in
your Note to me of July 17, 1922, (No. A 4262/3875/45)88 the statement (made in
another connection) that “The British postal authorities, however,
are not inclined to go out of their way to assist in promoting
competition with the Eastern and Associated companies’ route between
Europe and South America so long as the United States Government
withholds permission for the working of the Maranhão–Barbados–Miami
cable”.
I am now instructed, therefore, to communicate to Your Lordship, with
reference to the foregoing, that the refusal of the landing of the
Barbados–Miami Beach Cable until certain conditions have been
complied with is in accordance with a long established policy of the
United States Government not to allow the landing and operation in
the United States of a cable running from a country which denies
similar privileges to American cable concerns. The monopolies
enjoyed by the Western Telegraph Company on the east coast of South
America and the monopolies enjoyed by the All America Company on the
West Coast have their foundation in bilateral agreements which can
only be canceled by the action of the two parties to each agreement.
The resolution of the Western Telegraph Company (to which the Chief
of the American Department adverted as constituting evidence of the
fulfillment by the British Company of its part of the waiving of
these privileges) was in terms effective only when all South
American Governments concerned acquiesced in the waivers by the
Western Company and the All America Company.
The granting of a license to the Western Union to land at Miami a
cable to connect at Barbados with a cable of the Western Union
Telegraph Company awaits an expression from the Argentine Government
which can be regarded as acquiescing in rendering effective the
waivers of the Western Company. My Government does not consider that
the possibility of American competition with British companies is an
acceptable reason for the action of the British Government in
opposing the applications of American companies for privileges in
the Azores.
In presenting this matter anew to Your Lordship, I am instructed to
state that my Government cannot fail to be influenced by the feeling
that the British Government is unwarranted in opposing the
legitimate efforts of American cable companies to obtain in the
Azores cable facilities which would in no way interfere with the
exercise by British cable companies of privileges similar to those
sought by the American cable companies.
I have [etc.]
For the Ambassador:
Post
Wheeler
Counselor of
Embassy[Enclosure 2]
The American Ambassador (Harvey) to the British Acting Secretary of State for
Foreign Affairs (Balfour)
My Dear Lord Balfour: With all my
hesitation to infringe upon your time, which I appreciate is at
present over-filled, I feel that I should be doing less than my
Government would desire of me if I did not ask your personal
attention to my note No. 313 of yesterday, with reference to the
Embassy’s recent representations with respect to the cable situation
in the Azores.
I am deeply concerned over the reflection that the attitude of the
British Government, in opposing the application of American
companies for privileges there, must inevitably be construed by my
Government as a determination to assist British companies to
maintain control of cable facilities in the Azores to the exclusion
of legitimate competition of American companies.
I am [etc.]
[Enclosure 3]
The British Secretary of State for Foreign
Affairs (Curzon) to the American
Ambassador (Harvey)
[London,] 18 August,
1922.
No. A 5216/116/45.
Your Excellency: In a note of the 24th
ultimo, you inform me that the conditions on which the United States
Government is willing to grant license for landing at Miami have
been made clear to all parties concerned. I have the honour to
state, however, that His Majesty’s Government have never received
from the United States Government a copy of those conditions
although the line of cables terminating at Miami is partly owned by
a British company. The information with regard to the matter so far
as it is in the possession of His Majesty’s Government is as
follows:—
- 2.
- The (British) Western Telegraph Company has for some time
past enjoyed certain exclusive rights in Brazil, which have
been upheld by the Brazilian courts when challenged by other
parties. The Western Union Company desiring to meet the
demand in the United States for direct cable connection
between the United States and Brazil concluded an eminently
proper and business-like agreement with the Western
Telegraph Company in 1920 whereby the Western Union Company
became a partner in all the rights of the Western Telegraph
Company in Brazil, and the two companies agreed to lay a
joint cable from Brazil to the United States via Barbados,
the Western Union undertaking the section from Barbados
[Page 374]
to Miami, where it
secured a landing licence from the United States War
Department. In 1920 the Western Telegraph Company duly laid
the southern section from Brazil to Barbados at a cost of
some three million dollars and the Western Union Company was
about to land the northern section at Miami when it was
forcibly prevented from so doing by the United States
Government.
- 3.
- The Western Union Company took the case into the United
States courts, but the State Department, apparently fearing
an adverse decision, secured the passage of an act by
Congress in effect transferring the grant of landing
licences from the War Department to the State
Department89 and the act came into force
before any decision in the Miami case could be rendered by
the Supreme Court. Meanwhile, the matter had been referred
to during the International Congress on communications held
at Washington in 1920–21. The representatives of the State
Department explained that it was contrary to the practice of
the United States Government to grant landing licences to
companies enjoying exclusive privileges in foreign
countries, or themselves possessing such privileges. The
British representatives pointed out that the All-America
Company, which had obtained exclusive privileges on the west
coast of South America, had been granted a landing licence
in the United States. The State Department felt unable to
justify this inconsistency, but no action was taken until,
after informal discussions during the Disarmament Conference
a year later,90 an understanding was reached
that the Western Telegraph Company should abandon its
exclusive rights on the east coast and the All America
Company its similar rights on the west coast of South
America.
- 4.
- Notwithstanding the loss which had already been caused to
the British Company, His Majesty’s Government felt that a
fairly reasonable compromise had been reached and left the
further negotiations to the two companies. The latter
concluded an agreement at the end of last year which is
embodied in a resolution already in Your Excellency’s
possession, whereby each undertook to waive in favour of any
British or United States cable companies its respective
preferential or exclusive rights in those South American
countries where it claimed such rights.91 The
agreement was to become effective when the governments of
the countries concerned acquiesced in
[Page 375]
the waiver. The Western
Telegraph Company lost no time in notifying the Brazilian,
Argentine and Uruguayan Governments of their surrender of
all rights of an exclusive nature which they claimed or
possessed. In order to expedite a settlement they even
exceeded their contractual undertakings and urged those
governments to notify the United States Government of their
waiver. As far as I am aware, no delay occurred in Brazil.
The Argentine Government on or about May 4th last,
communicated to the United States Ambassador at Buenos Aires
a resolution signed by the Minister of the Interior on that
date to the effect that the Argentine Government were not
called upon formally to admit the relinquishment of a right
which—for them—did not exist, because they had already
decided in that sense.92 The
Uruguayan Minister for Foreign Affairs on June 6th last
communicated to the United States Minister at Montevideo a
legalised copy of correspondence showing that the Uruguayan
Government also held that cable companies could own no
preferential or exclusive rights in Uruguay.93
- 5.
- The requirements of the United States Government were thus
met in substance by the governments of all those countries
where the Western Telegraph Company claimed or possessed any
exclusive privileges. His Majesty’s Government have not been
informed that there has been any delay on the part of the
governments of Colombia, Ecuador or Peru in accepting the
waiver of similar privileges by the All-America Company,
though they are now making enquiries on that point.
- 6.
- None the less the issue of the landing licence at Miami is
still delayed and His Majesty’s Government are at a loss to
understand the reasons for the action of the United States
Government in this matter.
- 7.
- The United States Government first prevented the landing
of the Miami cable by force. Then they caused an act to be
passed for the express purpose of preventing its operation
or for enabling the licence to be cancelled in ninety days
if the cable were already being operated under the existing
legislation of the United States.94 They then further required the surrender of
the exclusive rights of the Western Company in South
America. Each of these steps involved much delay and loss to
both the British and the United States cable companies
concerned and, incidentally, deprived the public in the
United States of direct cable communication with Brazil by
the shortest route. His Majesty’s Government do not share
the objections
[Page 376]
of
the United States Government to the acquisition under
certain conditions of exclusive rights, which they regard as
legitimate inducements to the extension of business at
points where traffic would not be immediately remunerative.
Nevertheless His Majesty’s Government raised no objection of
principle to the transaction whereby both the British and
United States companies waived their exclusive rights, and,
so far as that transaction is concerned, the United States
Government have now secured the admission of the principle
which they desired.
- 8.
- The attention of the United States Government has been
called to the serious loss caused to the British company by
these continued delays. Representations having proved of no
avail His Majesty’s Government would be neglecting their
duty if they failed to protect the same British company from
further loss by the competition of United States companies
in other directions, as at the Azores and in the matter of
“urgent” telegrams between Europe and South America.
- 9.
- In this connection I observe that you are unable to
reconcile the action of His Majesty’s Government with the
statements made in my note of May 16th last.95
I venture to remind you of the passage in that note:
“requests for permission to land cables on British
territories will in future, as in the past be considered on
their merits …”96 The
merits of such requests have hitherto been considered purely
from the commercial point of view, and His Majesty’s
Government would be loth to introduce other factors into
their consideration. In this respect, however, the policy of
His Majesty’s Government differs from that of the United
States Government.
- 10.
- By section two of the act, to which I have referred, the
President is authorised to withhold or revoke landing
licences when he shall be satisfied that such action will
assist in securing rights for the landing or operation of
cables in foreign countries or in maintaining the rights or
interests of the United States or of its citizens in foreign
countries. His Majesty’s Government can only suppose that
the refusal to issue the Miami landing licence is an example
of the application of that section, though it is not clear
how such action can assist United States cable companies in
securing greater facilities in this country than those which
they already enjoy. The policy of His Majesty’s Government
has indeed been so liberal that all the cables connecting
this country with the United States are owned and/or
operated by United States cable companies, whereas,
[Page 377]
owing to the
different system prevailing in the United States, no British
cable company has been able to continue to operate to that
country at all. Moreover, a British landing licence carries
with it the valuable privilege of connection with the
British land lines, a privilege which the United States
Government is unable to confer. United States cable
companies have also been allowed the further valuable
facility of leasing private lines and dealing direct with
the public in this country. His Majesty’s Government would
regret the necessity for terminating any of these
privileges, but they feel that such liberality merits
reciprocity on the part of the United States Government,
where the interests of British cable companies are
concerned.
- 11.
- I should add that the only condition for which the British
companies are pressing as regards landing rights at the
Azores is that the proposed cables between the Azores and
North America should be restricted to North American
traffic, and that traffic from the continent for South
America should be exchanged with the Western Telegraph
Company at the Azores.
I have [etc.]
(In the absence of the Secretary of State)
W. Tyrrell
