852.75 National Telephone Co./365: Telegram

The Chargé in Spain ( Bucknell ) to the Secretary of State

123. My 121, May 13, 8 p.m.90 As a result of a conversation between Behn and Suñer tonight the Telephone Company case has been settled to the satisfaction of Behn. The settlement is embodied in an aide-mémoire which Behn presented to Suñer and which the latter approved subject to the final approval of the Caudillo which Suñer expects to obtain by tomorrow afternoon. The full text of the aide-mémoire will be telegraphed tomorrow as soon as it can be translated and after it is finally approved by Franco. In the meantime the following are the main points:

The International Telephone and Telegraph Company will be reinstated in the management and control of the National Telephone Company of Spain thus re-establishing the status quo ante of July 18, 1936.
The management of the company will be placed in the hands of an executive vice president named by the majority of American stockholders. He will be in control of all matters of the company as regards its general management subject only to the approval of the board of directors of the company.
No question will be raised with regard to the contract with the State or the contracts between the National Telephone Company of Spain and the International Telephone and Telegraph Corporation.
The Americans who have been separated from their posts in the company and the revision of whose cases has been solicited by the United States Government or who may be separated from the company in the future for whatever cause may be substituted by other Americans to whom the Spanish authorities will grant the necessary work permits without any obstacle as will be the case in regard to any other American personnel which will be named by the company.

Furthermore Suñer agreed to the list of American personnel to be named by Behn who are to take immediate charge of their respective [Page 886] departments; to a list of new directors; and to the calling of a general meeting without the necessity of awaiting the preparation of an actual balance sheet although some explanatory statistical data may be presented for the consideration of this meeting.

Behn is hopeful that of the eight Americans separated at least Caldwell will be reinstated in an executive position in the company. This latter point is still subject to some doubt.

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