852.75 National Telephone Company/3: Telegram

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

70. Your telegram No. 106, December 11, noon.34 I understand that the Cortes meets again on December 15 and that if the telephone company expropriation bill should reach a vote, there is considerable likelihood of its being passed. However, apparently unless the new Cabinet reintroduces the bill, the Cortes cannot act on it. I therefore desire you to obtain an interview with the Minister of State and/or the President as soon as possible and in any event not later than Monday, at which time you should inquire what the intentions of the Government are in the premises and make representations in the most vigorous possible terms, urging that the Cabinet not permit the reintroduction of this confiscatory proposal.

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Not only is it the conviction of the American Government that it would be manifestly unfair to present a bill of this kind without giving the officers of the company, both Spanish and American, an opportunity to be heard, but you should make clear that should the telephone company contract be abrogated in this manner, the American public would immediately assume that all investments in Spain were exceedingly unsafe and that the Spanish Government was prepared to deny any contractual rights acquired in good faith during the Monarchy. It would be a matter of regret to this Government should the hasty action of the Spanish Government affecting these large American interests render it necessary for this Government to support in behalf of those interests a pecuniary claim for damages.

It has been reported to me that neither the German controlled Trans-radio, nor the French, British or Italian cables, all of whose contracts were approved by the de Rivera administration, have been attacked. If the facts are as stated, you are authorized to mention these matters also, stating that should the telephone company expropriation bill be enacted, this discrimination against American property could not fail greatly to prejudice public opinion here.

Please continue to cooperate with Proctor and keep the Department closely informed.

  1. Not printed.