852.75 National Telephone Co./357: Telegram

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

107. My No. 99, April 29, 6 a.m. [p.m.] Since my interview with Franco there have been a series of conversations and negotiations between myself and various members of the Spanish Government, and others between Behn, members of the Government and members of the Telephone Company, with a view to giving practical effect to the promises made to me by the Caudillo and the Minister of Gobernación.

The greatest difficulty has centered around fixing a date within the immediate future for the general stockholders’ meeting. Serrano Suñer has insisted that before this meeting could be held a balance sheet must be prepared for submission to it. Based on statements made to me by the telephone authorities I have repeatedly maintained that it was physically impossible to prepare a balance sheet with [within?] a period of months and have insisted that in the event that the Caudillo’s promises meant what they purported to mean the meeting must be held forthwith in order to give practical effect to his assurances that the “control and possession” of the company would be immediately returned to the American majority stockholders.

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It now appears that Suñer has finally taken the line that he was misinformed about the possibility of a balance sheet being prepared within the near future and I have direct assurances from Gamero del Castillo, Minister without Portfolio, who talked with Suñer last night, that he will not insist upon a balance sheet being prepared before the meeting is held; that he will meet Colonel Behn next Wednesday87 to agree to this and to discuss the new nominations to the Company’s Board of Directors; and the entry into their functions of the new American personnel of the Company.

I have also received the same assurances from a person close to both Suñer and Gamero who is also in the confidence of the Embassy and am now inclined to believe that the matter will be satisfactorily resolved after Behn’s conversation with Suñer. The Embassy will however continue closely to follow the situation and will report any developments to the Department by telegraph. In accordance with plans previously reported to the Department I took occasion yesterday to present to the Foreign Minister my comments upon the informal charges which have been made against the American employees of the Telephone Company. These were based upon written statements submitted to me by the Telephone Company. I requested the Foreign Minister to reopen the cases and to ensure that all the Americans involved be given ample opportunity to present their defence against these charges. The Foreign Minister assured me that my comments would be given careful consideration and I am hopeful the Americans involved will at least be given the opportunity to reply to the charges. However, as previously indicated, I am not hopeful as to the final result of my intervention but the Embassy will continue to press for a fair hearing of the American individuals concerned.

In all the circumstances and believing that further steps at the moment with the Caudillo might be interpreted as a lack of confidence in his assurances concerning the Company I have, after carefully weighing the matter, decided to pursue my plans to sail from Lisbon on the 7th.

I believe that I have been successful thus far in my efforts to induce the Spanish Government to realize that merely being just and equitable in its attitude toward the Telephone Company cannot be used to wrench favors from the United States. However, in my conversations both with the Minister of the Interior and the Caudillo, strong hints were given which I ignored that the time was ripe for the United States to come to the assistance of Spain in this its time of need and. I was told yesterday that the Minister of Finance would seek an interview before my departure. In any case I believe that the Department may expect an early campaign on the part of the Spanish [Page 884]Government either in Madrid or Washington or both directed toward obtaining credits and/or a loan which would now appear difficult to obtain from other sources under present circumstances.

Should this campaign develop I would urge that the Department await my arrival in the United States before giving any decision in order that I may discuss personally its possible evaluation.

Weddell
  1. May 8.