352.1153 St 2/63
The Ambassador in Spain (Hammond) to
the Secretary of State
Madrid, March 9,
1928.
[Received March 21.]
No. 835
Sir: I have the honor to refer to the Embassy’s
despatch No. 824 of March 7th last,26 concerning the latest developments in regard to the
expropriation of property on behalf of the Spanish Petroleum
Monopoly.
Since this despatch was written, I have received a letter from General
Primo de Rivera which is in identic form to letters received by the
British and French Embassies informing me that in the future the
Valuation Commission, or Jury, is to receive new instructions in regard
to the treatment of the expropriated interests.
In order to be able to transmit this communication to the Department as
soon as possible, I have held up the pouch for one day, and I am
enclosing herewith the Spanish text and English translation thereof of
General Primo de Rivera’s letter together with the new rules prescribing
the procedure to be followed by the Valuation Commission.
I am today telegraphing a summary of the concessions made, Embassy’s
telegram No. 37, March 9, 5 p.m.,27 as it seems important that the
Department should know the latest developments in the matter, and I will
analyse more carefully in a future despatch the text of the rules in
question.
I am, however, enclosing herewith a legal opinion of Mr. Gonzalez, the
lawyer of Babel and Nervion,26 which throws considerable light on the wording of
the rules and while I believe that a considerable advance has been made
in regard to the satisfaction of the legitimate claims of the companies
in question, I nevertheless concur in Mr. Gonzalez’s opinion that the
wording of the rules is ambiguous and may well cause considerable
difficulty in the future.
I have [etc.]
[Page 858]
[Enclosure—Translation]
The President of the Spanish Council of
Ministers (Estella) to the American
Ambassador (Hammond)
My Dear Mr. Ambassador and Friend: I take
pleasure in sending you, herewith enclosed, a copy of the
modifications which have been made in the rules for the valuation of
petroleum property, such rules to cover equally both Spanish
subjects and foreigners. As you will observe, the best guarantees
are provided in these rules in accordance with the desires that have
been expressed, and I hope that for this reason the interested
companies of your nationality, as well as the government which you
so worthily represent, will understand and appreciate the spirit of
conciliation and the desire to reach satisfactory results which
animate us.
I take [etc.]
[Subenclosure—Translation]
Spanish Rules for the Valuation of Petroleum
Plants
The procedure of the Petroleum “Valuation” Jury will be governed by
the following rules, when the representatives of foreign companies
again appear before it:
- A.
- The interested parties may present to the Jury all
documents which they consider pertinent, it being also
understood that they will be obliged to present all other
documents which the Jury may consider necessary for the
proper documentation of its decisions.
- B.
- Every vote will be preceded by a discussion of all the
elements in the case, if so desired by the interested
parties, in order to fix the terms and bases of each matter.
The representatives of the expropriated interests may be
accompanied by judicial and technical experts.
- C.
- The minutes of the meetings shall report the discussions
in full, although this does not mean literally, as long as
the substance of the allegations and arguments, which each
member of the Jury may consider it expedient to make appear
therein, is stated. For this purpose, the minutes will be
revised before they are definitely approved.
- D.
- In further valuations the Jury will proceed to make the
appraisals covering, as heretofore, the actual value of the
plants and physical property, taking into consideration
their industrial efficiency and state of preservation, the
Jury’s policy to be inspired by a spirit of the greatest
impartiality, cordiality, and reasonable compromise. In case
of disagreement in regard to the value of lands, the
appropriate municipality will be requested to furnish an
official valuation.
- E.
- Upon the conclusion of the valuation of plants and
physical property, the Jury, using its discretion in the
appreciation of the statements made and the data produced in
support of the same, will fix, if there are just grounds
therefor, a total indemnity for each enterprise or entity
expropriated, taking into account such other factors which
it may consider computable for inclusion in the indemnity,
independently of the intrinsic value of the plant and the
physical property; in regard to this latter amount an appeal
may be made to the Council of Ministers, in the same way as
for the other valuations above-mentioned.
- F.
- The expropriated interests may collect immediately under
full reserve of all of their future legal rights, and on
account of the quantity which may finally be definitely
assigned to them, a sum equal to the amount of the valuation
which may have been made by the Jury.
