852.75 National Telephone Co./72: Telegram

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

102. The following is translation of text of reply just received from Minister for Foreign Affairs, No. 231 of even date:

“This Ministry has duly received the note, No. 580 of November 23, 1932, of the Embassy in the worthy charge of Your Excellency by which, in accordance with instructions from your Government, Your Excellency submitted its formal protest against any act that might cause grave prejudice to an investment of great importance of American capital, such as would result—so Your Excellency affirms—from the bill awaiting decision in the Cortes relative to the contract between the National Telephone Company of Spain and the Spanish State.

From the moment in which the matter referred to in Your Excellency’s note acquired a parliamentary status the Government of the Republic has accorded it all the attention which it merits. The Government considers that it treats of a question of domestic character which has arisen between the Spanish State and a Spanish company in whose charge a public service of general interest is conducted.

The Government, with due regard to the sovereignty of the Cortes and conscious at the same time of its duties and responsibilities, has followed the developments of this matter in order to guide it towards a solution which, by joint examination by both parties, may permit the undertaking of a revision of the contract, introducing those modifications which would eliminate from it what is regarded as onerous and derogatory to the national interests and contrary to Spanish legislation.

The Government of the Republic has now examined the note to which I have above referred, the verbal representations made by Your Excellency to the President of the Council of Ministers, as well as the statements contained in a memorandum that Your Excellency was pleased to hand him, and it hopes confidently that the solution which it had foreseen and which it considers feasible will be such as to dissipate any anxiety which the Government of the United States might feel for the interests of its nationals in connection with the [Page 574] Spanish telephone company. It feels all the more confidence by virtue of the fact that in the memorandum of Your Excellency it is indicated that the Government of the United States would not consider a solution of this character unacceptable.

I avail, et cetera.”

The passage in my memorandum referred to in the last paragraph is as follows:

“My Government of course could not regard as unacceptable an arrangement for the revision of the contract by mutual agreement between the Spanish State and the telephone company which would preserve their respective interests; but on the other hand, unilateral action against the company would certainly lead my Government to consider measures for the protection of the American interests involved.”

My comments follow.39

  1. Not printed.