Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 7, 1915

File No. 811.73/18.

The Secretary of State to the Governor of Massachusetts.

Department of State,
Washington, July 7, 1915.

Sir: I have the honor to invite your attention to the request of the Compagnie Française des Câbles, which appears to own and operate a submarine cable connecting the United States and France and a land line used in conjunction therewith running from Orleans, Massachusetts, to New York City, that it be exempted from certain taxes assessed by the authorities of the State of Massachusetts upon its property situated within that State. This request of the company is transmitted and supported by the Government of France.

In 1879 the Compagnie Française Telegraphie [du Télégraphe] de Paris à New York, which appears to have been succeeded in interest by the Compagnie Française des Câbles, made application to this Government, through the French Legation, for permission to land its proposed cable on the shores of the United States. In reply the Secretary of State transmitted, through the French Minister, a memorandum of the conditions upon which the landing of the cable would be permitted. This memorandum reads as follows:

memorandum of conditions required by the government of the united states.

1. That the company receive no exclusive concession from the Government of France which would exclude any other line which might be formed in the United States from a like privilege of landing on the shores of France and connecting with the inland telegraphic system of that country.

2. That the company shall not consolidate or amalgamate with any other line, or combine therewith for the purpose of regulating rates.

3. That it shall give precedence in the transmission of official messages to the Governments of the United States and France.

4. That charges to this Government shall be at the rate of those to the Government of France, and the general charges shall be reasonable.

5. That the Government of the United States shall be entitled to the same or similar privileges, as may by law, regulation, or agreement be granted to the French Government.

6. That a citizen of the United States shall stand on the same footing, as regards privileges, with the citizens of France.

7. That messages shall have precedence in the following order: A. Government messages; B. Telegraphic business; C. General business.

8. That the line shall be kept open for daily business, and all messages, in the above order, be transmitted according to the time of receipt.

The conditions set forth in this memorandum were accepted by the French Minister in behalf of the company on November 7, 1879, and the cable was landed and put into operation on November 20, 1879.

It appears that the Legislature of Massachusetts passed a law, approved April 10, 1913, which authorized the assessment of a tax upon the conduits, wires and other property of all corporations operating telegraphic lines within the State of Massachusetts and the French Ambassador, by note dated November 23 last, called the Department’s attention to the matter and intimated that the French Government would regard with pleasure the making of an exception in the application of this law in favor of the Compagnie Française des Câbles. The Department replied that it was unable to discover any treaty, understanding or agreement between the United States and France or between the United States and the Compagnie Française des Câbles exempting the company from such taxation. The Department has now received a further note from the French Ambassador dated May 28, 1915, a translation of which is inclosed herewith for your information. The Ambassador states in this note that the French Government accords to American cable companies in France the same treatment enjoyed by French companies; that the French administration, in a general way, places at the disposal of the several companies wires connecting their land stations with their respective offices; that when available such wires are laid without charge but that when laid at the request and for the exclusive use of the companies, such companies pay the cost of laying but are in no case assessed for the use thereof. He also states that the city of Paris, whose underground conduits are used for the wires of such companies, collects no taxes for the use of such conduits. In view of these facts and of the terms of the above-mentioned conditions upon which the cable of the Compagnie Française des Câbles was permitted to be landed in the United States, the French Government conveys its impression that the reciprocal treatment stipulated for in these conditions should be construed as entitling the Compagnie Française des Câbles to the same treatment in the United States with respect to taxation as is enjoyed by American cable companies in France.

In reply to this note the Department pointed out to the Ambassador that the objects sought to be accomplished by the conditions in question were merely those of preventing the formation by the company of a monopoly of submarine telegraphic communication between the United States and France, and of guaranteeing to the United States and its citizens the use of the cable on terms of equality with those enjoyed by the French Government and its citizens, and informed him that the Department does not perceive that these conditions have any legal bearing on the request of the Compagnie Française des Câbles that it be exempt from the taxes in question.

The Department also forwarded to the Ambassador, for the information of his Government, a copy of “An Act [of the Legislature of Massachusetts] relative to the taxation of the poles and wires of street railway companies” approved April 10, 1913, which is understood to be the law authorizing the taxes complained of, and pointed out that the taxes provided for by this law are to be assessed, not upon the use of telegraph lines, but upon the value of the conduits and other property of corporations operating telegraphic lines within the State of Massachusetts; that the law applies uniformly to all corporations, American as well as foreign; and that there is, therefore, no probability of discrimination against the Compagnie Française des Câbles such as the French Government apprehends might result; but that in case of the assessment to the company of taxes regarded by it as illegal, discriminatory or confiscatory the company would of course have access to the appropriate courts for a proper adjudication of the question.

There appears to be an equitable consideration in this matter, however, which has seemed to me of sufficient import to warrant its being brought to your attention. It seems that under the agreement between the French Government and the Compagnie Française des Câbles the latter transmits over its Câbles the official telegraphic communications of the French Government free of charge. It results, therefore, that in accordance with paragraph four of the conditions imposed by this Government upon the landing of the cable in the United States, which require that the charges made for transmission of the official messages of the United States shall be the same as those required for transmission of similar messages of the French Government, the company is required to transmit official messages of this Government free of charge. This results in a saving to this Government of several thousand dollars annually. The Compagnie Française des Câbles is the only submarine cable company which accords this favorable treatment to the Government of the United States and, while this is of course strictly in accordance with its agreement, it would seem to entitle the company to as liberal consideration as the Government of the United States or of the several States concerned can consistently bestow. I have the honor, therefore, to invite your attention to these facts and to the request of the French Government and this I do with every confidence that the authorities of Massachusetts will give the claims of the company as presented by the French Government friendly consideration, and will bear in mind the benefits reaped by this Government as hereinbefore stated.

The French Ambassador has been advised of this communication to you.

I have [etc.]

Robert Lansing.