852.75 National Telephone Co./3–1345: Telegram

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

534. Embassy’s 472, March 6, 10 p.m.76 Government and Company lawyers today signed memorandum to the effect that both parties are [Page 724] in agreement on conditions for the purchase/sale of ITT shares in CTNE and also in agreement on the English and Spanish text of bonds to be issued. The substance of the conditions of sale, in abbreviated form, will be incorporated in a bill to be presented to the Cortes, probably for action on March 15, which would authorize the Government to purchase the shares under the terms outlined. Subsequently the contract will be submitted to the Consejo del Estado which will determine whether it complies with the law.77

Upon approval by the Consejo del Estado the Government and ITT will formally sign the contract and at that time the Government will deliver provisional bonds to the company in exchange for the company’s shares.

CTNE is now arranging to deposit with the Institute de Moneda funds sufficient to pay for the indebtedness owed to ITT and it is anticipated that before the end of the present week the first payment of $1,500,000 will be transferred to the United States.

  1. Not printed.
  2. The Decree Law of April 13, 1945, authorizing the Spanish Government to acquire 318,641 holding shares in the Compañía Telefónica Nacional de España owned by the International Telephone and Telegraph Corporation of New York was ratified May 14. For text, see Boletin Oficial Del Estado, No. 138, May 18, 1945, p. 4053.