852.75 National Telephone Co./352

Memorandum of Conversation, by the Under Secretary of State (Welles)

The Spanish Ambassador called to see me this morning at my request. I told the Ambassador of the recent developments in the telephone case and emphasized my great surprise that when Ambassador Weddell had requested an interview with General Franco to discuss this exceedingly important matter, he had been told by the Minister of Foreign Affairs that other officials of the Spanish Government would discuss the matter with the Ambassador.

I told the Ambassador that Mr. Weddell had again been instructed to seek an audience with General Franco and to leave with him an aide-mémoire, of which I gave the Ambassador a copy.

I told the Ambassador that this Government considered that a fair and equitable solution of the telephone controversy was of fundamental importance in the relations between the two countries inasmuch as it involved the basic question of whether American rights and interests in Spain were to be accorded the just and equitable treatment in accordance with the principles of international law which the Spanish Government had repeatedly assured the Government of the United States these interests would be accorded.

I said that I believed the question was one of fundamental principle and in no sense subject to any bargaining, and that this Government must insist that the telephone properties be restored at once through some equitable arrangement to their rightful owners.

In conclusion I stated that one of the generally accepted rules of conduct in international relations was that an Ambassador had the right to request and receive an audience with the chief of the state to which he was accredited; that, as the Ambassador knew, the President was always willing to receive a foreign ambassador upon matters of official business if the latter so desired, and that I could not believe for a moment that such procedure would not be followed in Spain. I emphasized repeatedly to the Ambassador the very great seriousness with which the Government of the United States viewed the present problem.

The Ambassador, as he had so often done previously, told me that he had communicated with his Government on this subject upon innumerable occasions, that he had written and that he had cabled, and that he had expressed it as being his own personal conviction that the matter could and should be settled in an equitable manner inasmuch as the relations between the two governments could never be restored to normal until the telephone properties through some equitable arrangement were restored to the owners of the properties. The [Page 874]Ambassador said that he would again cable his Government in this same sense. He expressed, however, the utmost measure of discouragement and gave me to understand that, since the transfer of the former Under Secretary of State, Señor Barcenas, he personally had no contacts of a personal character with his own Foreign Office.

The Ambassador said it was all the more imperative that this situation be promptly settled in view of the increasingly disquieting situation in the world at large. He said that in his own judgment there were innumerable ways in which cooperation between the United States and Spain in these critical times could be of advantage to the latter country.

With regard to the European situation, the Ambassador expressed it as being his own conviction that any Spanish government that attempted to get the Spanish people into the war would find itself with a revolution on its hands within the ensuing 10 days. He said that what the Spanish people needed was food and not military adventures, and that the internal situation was so critical that any attempt on the part of Italy or Germany to force General Franco into the war would unquestionably result in revolutionary outbreaks throughout Spain.

S[umner] W[elles]