841.6463 Calcutta/10
The British Secretary of State for Foreign Affairs (Henderson) to the American Ambassador in Great Britain (Dawes)32
My Dear Ambassador: You will recollect that in the course of our interview on January 9th last you called my attention to certain proposals of the Calcutta Electric Supply Corporation having as their object the retention of the control of this Company in the hands of British subjects, and enquired what was the attitude of the Government of India towards the investment of American capital in that country.
In order to avoid all possibility of misunderstanding, I would explain that the Calcutta Electric Supply Corporation provide power to Calcutta and its environments under licences granted to them by the Government of Bengal, with the result that when the Company, who had already become aware that extensive foreign buying of their shares was taking place in the open market, received certain tentative proposals from American interests for the control of their business, they would have been guilty of a serious neglect of their responsibilities had they failed to inform the provincial authorities, although I understand that they were strongly pressed not to do so by the prospective purchasers. After carefully considering the matter, the Government of Bengal came to the conclusion that inasmuch as the Company are the sole purveyors of power for industrial and other purposes in a large and densely populated area, they could not regard with equanimity the possibility of the control of this vital public utility passing into foreign hands. The Government of Bengal, acting entirely within their rights, accordingly notified the Calcutta Electric Supply Corporation that they would welcome any action the Company might decide to take, such as the amendment of [Page 164] the Articles of Association, to guarantee that its control should remain in British or Indian hands, but without affecting in any way the position of the existing shareholders.
Your Excellency will readily appreciate that as it is entirely within the competence of the Government of Bengal to take such action as they may consider appropriate in the public interest to ensure that the control of a public utility operating under licence and within their jurisdiction does not pass out of British or Indian hands, this is not a matter in which His Majesty’s Government can intervene even should they desire to do so, more particularly as the policy in question entails no discrimination of any kind against United States interests as such. Nor can this policy be interpreted as indicating any hostility on the part of the Government of India to the investment of American capital in that country, which on the contrary is not less welcomed than that of any other foreign capital. I would add that I am in receipt of assurances that no suggestion that American investment was opposed by the Government of India was ever made by the Chairman of the Calcutta Electric Supply Corporation in his conversations with the representative of the United States company interested.
Believe me [etc.]
- Copy transmitted to the Department by the Ambassador in Great Britain in his despatch No. 710, March 5, 1930; received March 20.↩