852.75 National Telephone Co./361

Memorandum of Conversation, by the Chief of the Division of European Affairs (Moffat)

The Spanish Ambassador called this morning. I read him the first main paragraph of Mr. Weddell’s telegram No. 99 of April 29th giving General Franco’s personal assurances with regard to the return to the International Telephone and Telegraph Company of the possession and control of its properties.

I told the Ambassador that it was a great pleasure to be able to give him good news, and that I felt certain that this was due in part to his efforts.

The Ambassador replied that he felt that the point of view he had taken in Madrid last summer had at last borne fruit. At that time he [Page 882]had told General Franco and others that whereas public opinion in the United States had been exceedingly hostile to the Franco régime, the attitude of the Government had been, if not friendly, at least correct, and that he believed that it would be possible to build up satisfactory commercial and other relations if the Telephone Company’s case were disposed of. He had reiterated over and over again that without this nothing satisfactory could be accomplished.

The Ambassador then went on to say that this did not mean that he approved the Telephone Company’s contract, which he felt was a very onerous one and not consistent with Spanish dignity. Nevertheless he recognized that it should be modified by mutual agreement rather than by unilateral action, and that this mutual agreement could hardly be reached until the Telephone properties had been returned.

The Ambassador then went on to say that he appreciated our having made so clear to him that the return of the properties was the central and vital issue. He had telegraphed in this sense to his Government, which he felt had become confused by a number of subsidiary issues.

As he left the Ambassador said that he hoped I would telephone him as soon as the properties had been actually returned.

Pierrepont Moffat