852.6363/73: Telegram
The Secretary of State to the Ambassador in Spain (Hammond)
83. Your 105 October 21, 107 October 22, and 110 October 29.18 On October 31 a representative of the Standard Oil of New Jersey [Page 681] called at the Department to discuss the following cable which had been received from their Paris office:
“Referring to Spanish question at meeting just held with London friends present it has been unanimously agreed to maintain policy abstaining to supply Monopoly directly or indirectly and not to take any steps in this question without first consulting each other. Rumors have it that representative of Spanish Banking group has left for Berlin to negotiate with Soviet representatives. British Government has issued effective instructions to their Embassy at Madrid and we hope Washington Government will also take steps in this drastic action against established freedom of trade.”
He asked if the Department could confirm the statement regarding the issuance of instructions to the British Embassy at Madrid and was told that you had been advised that the British Embassy had been so instructed. However the specific terms of your 110 October 29 were not communicated to him.
He then asked if the Department would support American interests to the same extent that the British Foreign Office was reported to be supporting the British companies, to which the reply was made that the Department would expect the Spanish Government to accord to American companies no less favorable treatment than it accorded British and other foreign companies. He was further informed that you had been authorized in August (see Department’s 65 August 13, 3 p.m.) to answer inquiries by stating that the policy of this Government in general called for full and fair compensation to the expropriated companies for their property losses. However it was pointed out to him that it was impossible for the Department to make any precise definition as to what would be deemed to constitute full and fair compensation, particularly where the question of “good will” was concerned, and that each case would have to be determined on its own merits. It was further stated that the Department could not object in principle to the establishment of the monopoly by the Spanish Government and that its official interest at present was confined to the question of compensation.
He appeared to appreciate the position of this Government and understood thoroughly that the foregoing was given him for his private information.
You may answer inquiries in the light of the above information and you may further state your readiness to assist interested American companies which may become involved in expropriation proceedings in securing a fair hearing.
From what precedes you will perceive that the question of compensation for “good will” is necessarily one upon which the [Page 682] Department can take no position except as each specific case of expropriation arises.
- No. 110 not printed.↩