852.75 National Telephone Co./294: Telegram

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

202. Referring to my No. 155, August 12 [22], 3 p.m.,16 although Behn has been actively at work in endeavoring to adjust the status of the Telephone Company with the Government his efforts have not been satisfactory as yet. The Department will be apprised in detail [Page 846] of the situation upon the receipt of my despatch No. 154 dated September 26.

On September 29 during a visit to Madrid I was approached by the Under Secretary for Foreign Affairs who told me the Government would shortly make a decision regarding this matter and he strongly advised me to see the Minister for Foreign Affairs and reemphasize my Government’s interest in the attainment of an equitable solution. I accordingly called on the Minister for Foreign Affairs on September 30 and went over the whole matter. I stressed our Government’s generous attitude towards Spain recalling that for example while we could have used the cotton credits as a bargaining point we had not done so. I called the Minister’s attention however to the fact that before many months the present cotton credits would be exhausted, that the United States would be perhaps the only source of supply and that without equitable treatment of American interests the Spanish Government could not without rather poor grace solicit further help from us. The Minister appeared to assent and asked me what I thought constituted equitable treatment of the Telephone Company to which I replied that the management of the company be where it belonged, namely, in the hands of the majority of the stockholders, in a word that it be master in its own house. The Minister again assented and stated that he would do all he could to promote Colonel Behn’s desires and that he was optimistic of favorable results. He explained that the long delay in settling the affairs of the company appeared to have been provoked by certain minor officials of the company who were ex-soldiers who feared to lose their places if the management were returned to Behn. The Minister then informed me that the whole situation has been referred for final decision to the Sub-Secretary of the Presidencia who will make his report on October 3. The Minister hoped that this report would be satisfactory to the Telephone Company.

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