852.75 National Telephone Company/37: Telegram

The Ambassador in Spain (Laughlin) to the Secretary of State

87. Your 99, November 19, 1 p.m. On Saturday 19th not waiting for instructions I wrote a “private” letter to Azaña expressing concern at the action in the Cortes against the telephone company, [Page 565] reminding him of the declarations made by the Republican regime at its beginning regarding the respecting of previous engagements and of the American interests that will be affected by adverse action.

The same evening I spoke to the President of the Republic at dinner in the same strain and after consultation with Rock yesterday I visited Azaña in the evening and communicated the full sense of your telegram in detail exactly and forcibly but in spite of my representations I cannot regard his attitude as in any degree satisfactory. I am afraid the telephone company is facing a nullification of their contract as prejudicial to the interests of the Spanish State.

Azaña affirmed that there was no question of “confiscation” and that no confiscatory action would be taken but he spoke flatly of “nullification” of the contract in order to remake it in a form more favorable to the State. He claims that the existing contract is detrimental to Spanish interests and made a furtive allusion to illegitimacy of birth.

When I pressed him to say that he would oppose the pending bill he would say no more than that while he would be mindful of all the interests involved he would act in compatibility with the interests of the State.