352.1153 St 2/52: Telegram
The Ambassador in Spain ( Hammond ) to the Secretary of State
[Received 3:45 p.m.]
31. Embassy telegram 28, February 21st, 1928, 5 p.m. On February 25th French Ambassador received a letter from Primo confirming French Ambassador’s understanding of conversation of February 21. Primo reiterates Valuations Commission will act judicially in the future and will incorporate all protests and pertinent documents in the minutes. Gives, however, no assurances regarding Commission’s instructions to interpret “industrial value” of expropriated companies as set forth in royal decree, June 28, last. Interpretation these words is now crux of the situation. After long discussion between legal representatives of American, French and British interests, the two former communicated to the Minister of Finance yesterday that they would return to the Valuations Commission in view of recent assurances given by Government and on the understanding that such [Page 856] assurances covered fair interpretation of “industrial value” to mean the value of expropriated businesses taken as a whole, including property, trade marks, value of going concern now being used as such by monopoly and expenses winding up business. Leading lawyers in Spain and recently obtained legal opinions from Fromageot of French Foreign Office and Fourcade all sustain this interpretation of wording of royal decree. … British interests have sent Minister of Finance bitter protest again refusing to take part in the proceedings of Valuations Commission unless Government gives categorical assurances that industrial value will be given above referred to interpretation. Spanish Government obviously worried by violent French press campaign and has issued two long semiofficial communiqués which avoid the main issue, reiterating Government’s intention to act fairly, which is of course absurd if judged by past procedure, and stress fact that Spain will do nothing to injure the interests of the country (France) so closely allied to Spain by ties of friendship. Will report by telegraph further.