852.75 National Telephone Co./9–1944
The Ambassador in Spain (Hayes) to the Secretary of State
[Received September 28.]
Subject: Compañía Telefónica Nacional de España
Sir: With further reference to my despatch No. 2999, September 1, 1944,61 on the above subject, I have the honor to enclose herewith a copy of a memorandum of the substance of my conversation with the Chief of the Spanish State on September 11, 1944.
The day following that conversation the Vice President of the International Telephone and Telegraph Corporation received notification from the Subsecretary of the Presidency of the Government to the effect that the Presidency of the Government can not entertain the claims which are presented in the name of a foreign company in view of the fact that the right of representation of the general interests of the Compañía Telefónica Nacional de España before the Spanish State corresponds to that Company.
I immediately sent a personal note to the Minister for Foreign Affairs recalling assurances given to me by General Franco and expressing my belief that this notification must have been sent by inadvertence. I pointed out that the promise of fair treatment to the American interests in the Compañía Telefónica Nacional de España could only be carried out by fair treatment to that company. I requested the Minister to bring this notification to the attention of General Franco. I have received no reply to this note as yet.
In acknowledging receipt of the notification, Mr. Caldwell, Vice President of the International Telephone and Telegraph Corporation is reminding the Presidency that the Compañía Telefónica Nacional de España is the product of the intervention of foreign capital which still holds a controlling interest, and of foreign management, and that the denial of the Presidency to admit that the American interest in the company may address an appeal to the Spanish Government for action to remedy a condition which is injurious to that interest makes it necessary for the International Telephone and Telegraph Corporation to have recourse to the United States Government for protection of its interests.