The Secretary of State to the Ambassador in Spain ( Bowers )
7. Please note for your information the following instruction to Blake (which you are requested to transmit to Blake as Department’s No. 2, Jan. 29, 7 p.m.) in reply to Blake’s 1, January 23, 2 p.m., and to be considered in connection with your 6, January 14, 3 p.m., Department’s 5, January 19, 2 p.m., to Madrid and Department’s 1, January 19, 2 p.m., to Tangier.
It would appear from the Spanish note of January 22, 1930,18 which you state was the starting point of your recent conversations’, that the Spanish agreed to pay the total sum of 207,039.85 pesetas, (including the Rahamin Muyal claim of 10,000 pesetas,) with the reservation that a third class of eleven claims amounting to 62,993.55 pesetas, included in the above total sum, would be paid only upon condition of surrender of our extraterritorial privileges.
The Department believes that all the claims as stipulated above should be paid prior to recognition and without any reservation since it is desired that the question of the withdrawal of our extraterritorial privileges be considered as wholly separate from the question of claims and recognition of the Protectorate. You are quoted in a despatch19 as stating that the British secured settlement of their claims without even reference to recognition.
Department approves your suggestion that effort be made to secure settlement of Kettani claim in agreement with Spanish High Commissioner but (for your strictly confidential information) would be reluctant to submit to arbitration because of the cost involved. In view of the importance and soundness of this claim as asserted by you the Department would prefer that agreement be reached to settle this claim prior to recognition of the Protectorate although matter is left to discretion of American negotiators.[Page 1008]
Your suggestions regarding (4) of your formula are approved.
With respect to (5) Department believes that consideration advanced in last two paragraphs of Department’s 1, January 19, 2 p.m., still holds.
Department desires brief but concise statement indicating final formula and to be kept informed by cable of developments.