681.003/131: Telegram

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

6. After several conferences with the Spanish Foreign Office there would seem to be a possibility of reaching a compromise agreement on the following formula suggested by Blake.

The American claims in the Spanish Zone which have been approved as incontestable by the Spanish Government will be settled.
The Kettani claims will be reserved for adjustment by Rico Avello and Blake.
Political recognition of the Spanish Zone will be effected and normal relations set up between the Spanish Residence General at Tetuan and the American Legation at Tangier.
All legislation and taxation introduced by the Spanish administration in the Spanish Zone and which the Spanish High Commissioner desires to have applied to American ressortissants will be submitted [Page 1002] through the American Legation at Tangier for the consideration of the Department of State.
On the completion of the above program any other matters including the question of the capitulations will be taken up for consideration and new treaties that may be necessary to define the revised position of the American Government in the Spanish Zone will be made a subject of discussion between the two Governments.

Paragraphs (4) and (5) have not yet been introduced into the conversations and will only be made use of according to the exigencies of succeeding conversations.

Blake feels we are fully protected by this formula. Please cable instructions.

Spanish Foreign Office state that they will require 10 days to 2 weeks to consider this matter consequently Blake and Dempster leaving for Tangier tomorrow. If agreement is reached on above line of action conversations will be pursued between Blake and Spanish High Commissioner in Tetuan.