852.75 National Telephone Co./380: Telegram

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

459. The growing conviction on the part of the Spanish authorities that we are in earnest in our refusal to permit the telephone company case to be used as a bargaining point coupled with our determination not to consider or discuss any Spanish needs until American rights and interests are recognized has had its expected result. Following a series of conversations with Suñer Colonel Behn has now reached an agreement which he is satisfied will return the American majority stockholders to the effective direction and control of the telephone company. The annual meeting has been set for September 14th. The Minister of Gobernación also approved a list of directors to fill existing vacancies, who have since been duly elected at a directors meeting held today. Furthermore Suñer has approved a complete new list of directors which will be elected at the annual meeting. Behn has also obtained the consent of the Spanish authorities for the appointment of Caldwell as executive vice president of the company who has now taken office and is in effective charge of the company’s operations and in addition Behn has obtained the complete [consent?] of Suñer to his proposed reorganization of the company.

Finally it was agreed that the Government delegates will in the future confine themselves to the rights and duties set forth in the contract.

Under these circumstances I desire to make the following recommendation which if adopted would in my opinion be of material assistance in any future dealings with the Spanish Government: I propose that I now be authorized to call upon the Foreign Minister and recall to him his request that I endeavor to obtain supplies of ordinary gasoline for Spain and state that I am now informed by my Government that there would be no objection from our point of view to the Spanish Government’s obtaining such quantities of ordinary gasoline for which British navicerts can be obtained and which can be transported in tankers of other than American flag.

It is doubtful [sic] the British now have in Spain an official of the Ministry of Economic Warfare who is studying Spanish requirements in the way of gasoline and it is therefore believed certain that it would be impossible for the Spanish authorities to obtain navicerts for any petroleum products shipped from the United States in excess of their own bona fide requirements. Thus the proposed action would be completely in line with the Department’s general policy explained in its telegrams 187, August 1, 6 p.m., and 191, August 5, 5 p.m.95

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I suggest that no reference be made on this occasion to the satisfactory solution of the telephone company case for the reason that this would inevitably be construed as an admitted return on our part for Spanish concessions in connection with this American property. The fact that gasoline suddenly became available without explanation will perhaps be sufficient to convince the Spanish authorities that we are only prepared to deal generously with them when American rights and interests are respected.

As regards any further Spanish needs for surplus commodities including cotton, wheat, et cetera, I would suggest that these problems be held in abeyance pending some concrete request or proposal from the Spanish Government, at which time the Department would be promptly and fully informed.

  1. Neither printed.