884.6461 Tsana Dam/390

The Minister in Ethiopia (Southard) to the Secretary of State

No. 1143

Sir: I have the honor to refer to the Legation’s No. 1139 of February 16th, 1933,26 enclosing copy of the Anglo-Egyptian proposal to the Ethiopian Government for an additional survey of the Tsana dam and road project.

This proposal greatly disappointed the Emperor (he expected an actual construction proposal) who sent his Minister of Foreign Affairs to the Legation to ask informally what we thought the Ethiopian Government should do about it. I knew from conversations with Mr. H. A. Lardner of the White Corporation that nothing more could be expected from the British and Egyptians at this time. I also knew that Mr. Lardner much desired the approval of this new survey arrangement in order to keep his company in touch with the situation and in order to keep the project alive until there shall have been arrived at some practical plan for financing. We therefore informally advised the Minister of Foreign Affairs of our opinion that the Anglo-Egyptian proposal should be accepted.

The proposal was thereupon given into the hands of the commission named in our No. 1138 of February 14th, 1933, and this commission after less than a week of deliberation, and presumably as influenced by the Emperor, recommended acceptance. The Legation understands that two members of the commission, Doctor W. C. Martin and the Fitaurari Tafessa, held out for compelling the British to provide funds at once for a beginning of the construction or at the least to pay the Ethiopian Government a substantial cash inducement to keep the project open by authorizing another survey. Doctor Martin attended only the first meeting of the commission; or so he personally told me. He allegedly refused to attend subsequent meetings because of disgust that the actual construction was to be further delayed, and because the delay proposed would in his opinion merely play into British hands and perhaps eventually make possible the placing of the actual construction with British interests. The Fitaurari Tafessa, who is understood lately to have become somewhat of an Anglophobe, agreed with Doctor Martin, but is alleged to have gone further and charged in the secret meetings of the commission that the American company was playing the British game and keeping the Ethiopian Government from realizing immediate cash payments in the way of “indemnities or royalties.” These two gentlemen were overruled by the other members, and a memorandum [Page 876]of acceptance of the Anglo-Egyptian proposal was drafted as per enclosed translation.27

This memorandum was delivered two days ago to the British and Egyptian delegates and they announce their entire satisfaction with it. Naturally, under the circumstances, Mr. Lardner concurs. By influence of the Minister of Foreign Affairs the memorandum continues the specific mention of the White Engineering Corporation as initiated in previous documents on the Tsana negotiations. The Legation understands that the next step is to arrange for the issuance by the Egyptian Government of a cheque in the amount of US$130,000.00 to be sent to the Ethiopian Government for transfer to the White Engineering Corporation. We understand that the British, Egyptian, and American delegates to the conference will leave in about ten days for Cairo to conclude this bit of the business. Presumably the American survey party will begin work at the beginning of next dry season in September or October. There is now not sufficient time to organize and begin caravan travel before the annual summer rains arrive.

. . . . . . . . . . . . . .

The final construction contract originally planned for this conference has, for reasons known to the Department, to be delayed for another year or so at the earliest. The fault is mainly with British and Egyptian inability to provide the financial guarantees required. The Ethiopian and American parties to the negotiations have been quite ready to get on with serious and final construction contract and work. In consideration of all the circumstances, however, the conference just closed appears to have been a successful one.

Respectfully yours,

Addison E. Southard
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