811.7353b W 52/50

The Ambassador in Great Britain (Harvey) to the Secretary of State

No. 1839

Sir: I have the honor to refer to my cable No. 536, dated November 16, 5 p.m., 1922,99 and to report that, in compliance with the Department’s cable Instruction No. 306, dated October 7, 7 p.m., 1922, a Note was addressed to the Foreign Office on October 18, 1922, re-iterating the position of the United States with respect to cable concessions in the Azores desired by the Western Union Telegraph Company and the Commercial Cable Company. A copy, in triplicate, of that Note is attached hereto.

A reply has just been received from the Foreign Office, a copy of which is transmitted herewith in triplicate, in which it is suggested that the British and the United States cable companies should be allowed to come to direct agreement under certain conditions with regard to the Azores traffic, “untrammelled by administrative restrictions on either side”, and that “on the conclusion of such an agreement and its confirmation by the issue of landing licences for the Azores cables in the United States, and on the full and immediate renunciation of the exclusive rights of the All-America Company in Colombia, His Majesty’s Government will have much pleasure in withdrawing their opposition to the applications of the Western Union and Commercial Cable companies at the Azores.”

I have [etc.]

For the Ambassador:
Oliver B. Harriman

First Secretary of Embassy
[Page 380]
[Enclosure 1]

The American Ambassador (Harvey) to the British Secretary of State for Foreign Affairs (Curzon)

No. 410

My Lord: As I have previously had the honor to bring to Your Lordship’s attention, two American companies, the Western Union Telegraph Company and the Commercial Cable Company, have for sometime past sought to obtain from the Government of Portugal certain concessions for the landing and operating of cables at the Azores. It appears, however, that although the Government of Portugal is quite prepared to grant the concessions desired, it has been deterred from so doing through the active opposition of His Majesty’s Government exercised through the British Minister at Lisbon.

From enquiries and representations made at the Foreign Office by this Embassy it is understood that the opposition of the British Government to the concessions applied for by these American companies was due to the desire to protect certain British cable interests already established in the Azores from the competition which would result from the presence there of American companies, competition which might result, it was believed, in financial loss to the same British company which, it is alleged, has already suffered through the refusal of the Government of the United States to grant, until certain stipulations were fulfilled, a license for the landing and operating at Miami, Florida, of a cable in which it held an interest. Although, as I had the honor to point out in my note of July 24th last,1 my Government was unable to admit that the question of the license to land the cable at Miami and the question of the concession to American companies at the Azores were in any way related, the statements of the Foreign Office that His Majesty’s Government was unable to change its policy of opposition to American concessions at the Azores until the question of the landing at Miami were settled led to the natural conclusion that when this license was granted British opposition to the Azores concessions would be withdrawn.

On August 25 [24], 1922, as the Foreign Office has already been advised, the President of the United States signed the license authorizing the Western Union Telegraph Company to land and operate the Barbados–Miami cable. It has therefore been a matter of surprise to my Government that, as this Embassy has been recently informed, the British Minister at Lisbon continues his active opposition to the granting by the Portuguese Government of the applications of the American companies even though highly placed Portuguese officials have intimated that their Government is quite [Page 381]prepared to grant at once the concessions desired by the American companies.

It is understood that the condition which His Majesty’s Government, at the instance of the British cable companies, desires the Portuguese Government to impose upon the American companies is that the proposed American cables should be restricted to North American traffic, and that the traffic from Europe to South America should be routed over the Western Telegraph Company’s lines. In this connection it may be well to point out that acquiescence by the Government of Portugal in such a policy would constitute a violation of the International Telegraph Convention, to which convention the Portuguese Government is a party, which obligates the signatory states to require cable companies to respect the routing directions of cablegrams.

Acting under urgent instructions from my Government, I have the honor to request Your Lordship to examine again this question with a view to obtaining the withdrawal of the opposition heretofore exercised by His Majesty’s Government on the Government of the Republic of Portugal to the serious detriment of legitimate American interests.

I have [etc.]

For the Ambassador:
Oliver B. Harriman

First Secretary of Embassy
[Enclosure 2]

The British Secretary of State for Foreign Affairs (Curzon) to the American Ambassador (Harvey)

No. A 6715/116/45

Your Excellency: I have had under consideration your note No. 410 of the 18th ultimo respecting the applications of the Western Union and Commercial Cable Companies for landing licences at the Azores, and I note Your Excellency’s assumption that now the Miami landing licence is granted, the opposition of His Majesty’s Government to those applications will be withdrawn.

2.
You will recollect that the Miami landing licence was only obtained in return for the cession by the Western Telegraph Company of its valuable rights in Brazil and, further, that, as part of the same arrangement, the All-America Cable Company was to abandon its similar rights in Colombia, Ecuador and Peru. The Miami transaction should therefore have been complete in itself and the issue of the landing licence, being, as it was, a part of the transaction, can scarcely be held to give the United States cable companies [Page 382]a claim to further consideration on the part of His Majesty’s Government. Owing, however, to the delays which occurred in the issue of the licence, the Western Telegraph Company suffered a loss of some four hundred and fifty thousand dollars in interest and depreciation alone for which no compensation has been offered. Nor have the exclusive rights of the All-America Cable Company in Colombia yet been waived with that completeness on which the United States Government insisted in the case of the similar British rights in the Argentine and Uruguay. According to a report of October 6th from His Majesty’s Minister at Bogotá the Colombian Government had not at that date received any notification from the All-America Cable Company, and the government only expressed their readiness to accept the waiver, when received, for the period of the existing concession, expiring on August 25th, 1924.2 Not only, therefore (unless the position has been subsequently modified), have the All-America Cable Company not completed their undertaking, but the Colombian Government are leaving the way open for a renewal of the company’s exclusive rights on the expiry of the present concession. In these circumstances, you will, I feel sure, agree that His Majesty’s Government would be failing in their duty if they encouraged any further diversion of traffic from the Western Telegraph Company by United States cable companies.
3.
I am aware that the United States Government base their treatment of that company on the principle that landing licences are not granted in the United States to cable companies possessing exclusive rights. As stated in paragraph 7 of my note of August 18th last,3 His Majesty’s Government do not share the views of the United States Government with regard to exclusive rights, and, while they regret the difference of opinion on this point, they feel that their views are entitled to as much consideration as are those of the United States Government. In the particular case of the Miami cable the United States secured the recognition of their principle; in the case of the Azores landings it would therefore seem equitable that the United States Government should accept the views of His Majesty’s Government, the more so as the arrangements which His Majesty’s Government desire to secure at the Azores would not in practice prejudice the interests of the United States companies.
4.
I am most anxious to remove any misunderstandings on this point from the mind of the United States Government, and therefore venture to remind you that the Western Telegraph Company merely propose that their route to South America shall continue to [Page 383]be regarded as the normal route for “unordered” telegrams from Europe, which, indeed, its directness and shortness as compared with that via New York manifestly make it. Telegrams ordered via the United States cables would, however, be forwarded freely by those cables. In order to close the matter, I therefore have the honour to suggest that the British and United States cable companies should be allowed to come to a direct agreement on this basis with regard to the Azores traffic, untrammelled by administrative restrictions on either side. On the conclusion of such an agreement and its confirmation by the issue of landing licences for the Azores cables in the United States, and on the full and immediate renunciation of the exclusive rights of the All-America Company in Colombia, His Majesty’s Government will have much pleasure in withdrawing their opposition to the applications of the Western Union and Commercial Cable companies at the Azores.
5.
The above distribution of traffic complies with those provisions of the Telegraph Convention which you have quoted. I have, however, felt bound to inform the Portuguese Government that the United States cannot properly claim the benefit of those particular provisions, seeing that the United States Government have expressly declared their inability to grant their benefit to the other powers signatory to the convention.

I have [etc.]

Curzon of Kedleston
  1. Not printed.
  2. Ante, p. 370.
  3. See telegram no. 15, Mar. 11, from the Minister in Colombia, vol. i, p. 525.
  4. Ante, p. 373