852.75 National Telephone Co./300: Telegram

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

232. My telegram No. 202, October 2, 3 p.m. Colonel Behn informs me that there has been no change in the relations between the Government and the Telephone Company since his arrival here on July 30. He has talked with the former and present Ministers for Foreign Affairs, the Minister of Finance, the Minister of Commerce and Industry, the Sub-Secretary for Foreign Affairs, the Sub-Secretary of the Presidency. While the attitude of these officials appears to be friendly, he had been told that the final decision rests with the Minister of the Interior. Although Behn has made every possible effort since July 30 to see the Minister of the Interior, he has not succeeded and was informed only yesterday that the Minister of the Interior refuses to see him at the present time. Behn has now requested through the Sub-Secretary of the Presidency either an interview with General Franco or that he designate a committee of three or four Cabinet Ministers to receive Behn and discuss the basic question of the Telephone Company with him. He expects an answer on November 22 to this request. Behn states, and I concur, that this is the final effort which he is able to make on his own behalf to straighten out this highly unsatisfactory situation through friendly negotiations. He adds that if this last effort fails he sees no possible alternative except to request diplomatic intervention on the part of our Government either through the Spanish Ambassador in Washington or through this Embassy.

I am convinced that Behn evidenced not only patience but that he has acted with tact and discretion and that he has met with the maximum of procrastination and evasiveness on the part of the Spanish officials. The refusal of the Minister of Interior even to receive him and discuss the basic question cannot I believe be explained on any grounds other than the intention of this Government to retain the control and management of the Spanish Telephone Company and to ignore the legal rights of the majority stockholders, namely, the International Telephone and Telegraph Company.

I will report next week the results of Behn’s démarche through the Sub-Secretary of the Presidency together with my suggestions for possible action by the Department.

In the meantime Behn informs me that he has received confidential advices that Ambassador Cardenas has asked to see Warren Pierson, president of the Import-Export Bank. Although the Embassy has received no official intimations that the Spanish Government is seeking credits in the United States, the visit of Cardenas to Pierson may well be for that purpose. If this be true, I venture to suggest that the [Page 849] Department request Pierson to make no commitments whatsoever pending a final solution of this telephone question or at least pending a further report from me in line with the above.