352.1153 St 2/69: Telegram
The Secretary of State to the Ambassador in Spain ( Hammond )
38. Your 56, May 31, 5 p.m. The attitude of the Spanish Government and of the Valuation Commission in failing to formulate [Page 867] a definition of the criteria (including “industrial value”) on which compensation to the expropriated companies should be based, as well as its failure to review the awards made previous to the issuance of the new rules transmitted with the Embassy’s despatch of March 9, is most disappointing and this Government doubts whether any satisfactory solution can be attained until such a definition has been framed and has been recognized by the companies as affording a substantially just basis for compensation. This Government shares the apprehensions of the French Government and will, of course, expect equal treatment. You may therefore second the French protest along similar lines if in your judgment it seems expedient.
[Paraphrase.] Standard Oil representatives here, with whom the question has been informally discussed, are of the opinion (the Department being inclined to concur therewith) that an agreement among the affected foreign companies regarding the nature of such a definition and in order to act together to urge the Spanish Government to adopt it would seem by the logic of the situation to be suggested as in the best interest of said companies. Playing one off against another by dealing with each company individually and separately would otherwise be to the advantage, obviously, of the Spanish Government; while, also obviously, if the companies take a united, common stand, their Governments will be enabled to coordinate better and to make more effective whatever diplomatic support from time to time may seem required by the situation.
The Paris representative is being instructed by Standard Oil to start conversations toward such an agreement with representatives of the British and French oil companies. You may informally discuss matters with your British and French colleagues and with representatives of the oil companies in Madrid. [End paraphrase.]
Please keep Department informed of developments.
Please mail cipher copies of your 56 and of this telegram to Paris and London for their information and guidance.