853.51/278
The Minister in Portugal (Dearing) to
the Secretary of State
Lisbon, June 4,
1925.
[Received June 26.]
No. 1094
Sir: I have the honor to refer to the
Department’s instruction No. 642, of April 27, 1925,6 directing me to report with
regard to a recent agreement whereby the Paris Stock Exchange had
reestablished the quotation of Portuguese stocks and bonds, among which
were the three series of the 3% External Loan, and to my despatch No.
957 of January 10, 1925,6
stating the substance of a conversation between the then Portuguese
Minister for Foreign Affairs and the Belgian Minister at Lisbon in which
I took part, concerning the discrimination shown in the matter of the
various foreign holders of the Portuguese tobacco bonds, and to transmit
herewith a memorandum of a conversation which I recently had with a
member of the Ministry of Finance, Dr. Alberto Xavier, germane to the
question, together with copies and translations of two interviews7 granted by Dr.
Xavier to a representative of the Diario de
Noticias.
I have [etc.]
[Enclosure—Extracts]
Memorandum by the Minister in Portugal (Dearing)
I saw Dr. Alberto Xavier, Director Geral da Fazenda Publica,8
in the Ministry of Finance, this afternoon at 5 o’clock. It had been
difficult to arrange the meeting, but I was received by Dr. Xavier
most courteously. I learned in my talk with him that the Government
Tobacco Monopoly 4½% Bonds of 1891 and 1896 are not included among
the Portuguese issues whose quotations have been reestablished by
the Paris Stock Exchange.
. . . . . . . . . . . . . .
… He said there had been a misunderstanding on the part of the
authorities of the Paris Bourse, but that when he had explained the
state of affairs the 3% bonds of the various series outstanding were
again admitted to quotation.
The situation with regard to the tobacco monopoly bonds, 4½% series
of 1891 and 1896, is different, and these bonds are not yet quoted
for reasons that will be set forth a little later.
. . . . . . . . . . . . . .
[Page 885]
Dr. Xavier said that there were two situations to deal with in
France. The number of French holders of Portuguese External bonds,
particularly the tobacco bonds, is not yet known, but as the time
limit for stamping expires June 30th next he hopes soon to know the
extent of the French holdings.9 When he does know, he will arrange for
foreigners in Portugal and the colonies to have their bonds stamped
so they may be treated in the same way as foreigners outside of
Portugal and the colonies. He feels he cannot do this until the
French situation clears up, as Portuguese holders might contrive to
escape if he attempted it.
The other phase of the French situation is the fact that from the
start the Portuguese tobacco monopoly has been financed and
controlled by a French group. This group is in relation with a
strong Portuguese group which holds many of the tobacco bonds. Dr.
Xavier feels pretty sure that this group holds the larger number of
the tobacco bonds in French hands. The present tobacco monopoly
expires next year. In granting a new contract to the monopoly the
Portuguese Government wishes to make and not to have to accept
conditions. So there is a struggle going on between the French and
the Portuguese, the French who hold the tobacco bonds and who
control the monopoly trying to arrange the situation so as to get
all they can from it, the Portuguese Government trying to escape the
exactions of the monopoly backers and to make the monopoly a more
fruitful source of revenue.
. . . . . . . . . . . . . .
