811.7353b W 52/174: Telegram

The Chargé in Great Britain (Wheeler) to the Secretary of State

516. Recently, as an outcome of conversations between Sperling and myself in re the Azores cable situation, the suggestion was made that Sir John Pender and Mr. Carlton be invited to confer together at the Foreign Office at which conference representatives of the Foreign Office, the Postmaster General and this Embassy should be present, with a view to ascertaining whether the differences between their companies might not be adjusted. The first meeting under this arrangement took place yesterday.

In the discussion it developed that at the bottom of Pender’s opposition to the Western Union applications at the Azores is the agreement by which that company is to subscribe $1,250,000 for the construction of the Italian cable from Fiumicino to the Azores via [Page 300] Malaga. As this cable will eventually be a part of the Italian cable to South America which is to be laid Fiumicino–Malaga–Canaries–Fernando–Noronha–Brazil, it was claimed by Sir John that a Western Union interest therein would be in violation of the agreement of July 24th, 1919, which created the through line via Barbados. Carlton admitted that this was an arguable point and offered to confine the Western Union subscription to the Italian cable to the section between Malaga and the Azores. Pender accepted this offer in principle. Both Pender and Carlton then dictated tentative heads of agreement which cover the same points as the Western Union offer of June 26th (reported in my 250, June 26, 4 p.m.) plus the above and a clause giving Pender’s group the option of taking an interest of 25% in the Malaga-Fiumicino portion of the projected Italian scheme. Both gentlemen indicated their complete satisfaction with this arrangement and if no new difficulties arise I anticipate that the withdrawal of the British opposition will follow in the near future.