852.6363/69: Telegram
The Ambassador in Spain (Hammond) to the Secretary of State
[Received 12:25 p.m.]
107. My telegram 105 of October 21, 11 a.m. Foreign oil interests here are apprehensive that their stocks and property may be seized at once and inadequate compensation given. The capital of the Spanish monopoly will not be over 250,000,000 pesetas. This would seem to be insufficient to provide working capital and likewise give adequate compensation for the fixed property of the companies for which 200,000,000 pesetas would be claimed.
More than 75 percent of the property used in the production and distribution of petroleum products is in the hands of American, French, and British interests and it is their belief that the Spanish Government intends to provide compensation only for stocks on hand and fixed plant, less depreciation, and to ignore for purposes of compensation all business goodwill.
Considerable friction will probably be produced by the arbitrary nature of the Royal decree and the foreign interests involved may ask for the intervention of their Governments. In case of necessity am I to be guided by Department’s telegram No. 65 of August 13, if fair compensation should be given for value of going concern and business goodwill?