852.6363/83: Telegram

The Ambassador in Spain ( Hammond ) to the Secretary of State

120. My 116, November 17, 5 p.m.23 The last paragraph of the note in reference to the rights of the State over industries is certainly drastic and as interpreted by the head of Commercial Section of the Foreign Office means that the State has a right to take over any industry at any time without having any obligation whatever to take account of earning power and goodwill. Reference in the note of taking over such property as may be needed may mean that only a part of the property engaged in the petroleum business will be paid for and the rest will be left valueless on the hands of the companies. Such is apparently the plan of the monopoly. I beg to point out the importance of the principle involved in bringing any established industry to a standstill at any moment without proper compensation and to emphasize the necessity for full payment of all property invested in the petroleum business whether needed by the monopoly or not, as property not taken will represent almost a dead loss. Shell and Standard Oil have decided to cease bringing in supplies and fear that the dictatorial powers of the Government will be used to fine them heavily for obstructing the monopoly.

British Ambassador informs me he has had no reply to his note asking for payment of property at the time property is taken over and is today writing again for an answer. French Ambassador informs me he has decided to await developments and make no further representations until Spanish Government takes some definite action of expropriation.

Hammond
  1. Not printed; it contained a summary of the Spanish note verbale, supra.