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  4. Document 718

352.1153 St 2/42: Telegram

The Secretary of State to the Chargé in Spain (Blair)

[Paraphrase]
Washington, February 14, 1928—6 p.m.

17. Reference your 25, February 13, 3 p.m.

(1)
Is any change in the attitude of the British Embassy in Madrid and of the British Foreign Office indicated by the fact that, in withdrawing their representatives from the central Valuation Commission in Spain, the British oil companies are acting with the American and French companies?
(2)
The reluctance of the oil companies to continue maintaining representatives on this Commission is fully appreciated by the Department; but a question has arisen here in conversing with the Standard Oil Company of New Jersey. It is whether withdrawing these representatives jeopardizes somewhat their position as to entering protests against the Commission’s methods on its record of the proceedings and thus weakens their position in any appeal proceedings hereafter, because the Spanish Government may later argue that remedies open to the companies under the decree were not used by them. Further information as to this point is desired by the Department before forming an opinion regarding the action of the companies.
(3)
A conversation with the Standard Oil Company introduced an informal suggestion that one of the companies might sue in the Spanish courts in order to test the decree’s constitutionality and the constitutional authority for the issuance of the decree. In such a contingency the Spanish Government, it was thought, might perceive the wisdom of changing its present position. The Standard Oil Company is consulting its representatives in Spain regarding the foregoing, which has also been discussed here with the French Embassy. The latter is communicating the suggestion to its Government. After you informally consult your French colleague and the American oil companies, your comments on the suggestion will be welcome, especially as to whether any diplomatic representations by the United States Government would be embarrassed by the filing of such a suit.
Kellogg