It would be improper for me to make direct representations to the
Tribunal de Contas and I must leave negotiations with that court to the
Brazilian Ministers and the representatives of the cable company. The
latter believe that progress is being made and that there is reason to
expect that the 1919 concession will be registered before long.
[Enclosure]
The American Ambassador (Morgan) to the Brazilian Minister for Foreign Affairs
(Da
Gama)
Rio
de Janeiro, June 24,
1919.
No. 562
Monsieur le Ministre: I have the honor to
hand Your Excellency herewith, in Portuguese, a memorandum on a
subject which my Government considers important, i. e., the
projected amplification of the present inadequate means of
telegraphic communication between the United States and Brazil, and
between other countries of the American continent. It is to this
matter that the telegram from the Department of State refers, a
paraphrase of which I have also the honor to hand you in
Portuguese.5
In view of the fact that more than one cable concession has recently
been granted by Your Excellency’s Government to cable companies of
British and French nationality and, furthermore, that in the
petition for a new cable concession from Brazil to Uruguay, which
Mr. Frank Carney, of this city, the representative of the Central
and South American Telegraph Company, recently, in his own name,
presented to the Minister of Viagao, the objections of the Tribunal
de Contas were met to registering the cable concession granted to
the said Company in 1917, I was under the impression that Mr. Carney
would encounter no difficulties in obtaining a new concession for
the laying of the projected separate cables from Rio de Janeiro and
from Santos to the River Plate.
From the enclosed memorandum, Your Excellency will observe that the
mode of procedure which Mr. Carney followed in relation to this
concession was the one suggested to me by Dr. Tavares de Lyra, when
Minister of Viagao in September, last. I communicated, at that time,
the Minister’s suggestion to my Government, and, on the strength of
his assurance that the concession could be arranged, the Company has
proceeded to order the necessary cables and has incurred a very
heavy expenditure thereby. It was, therefore, with surprise and
disappointment that I learned recently that objections had been
raised in the Ministry of Viagao to granting the new concession and
that the matter was postponed. It was also a cause of disappointment
that the Tribunal de Contas declined to register another contract
which was granted Mr. Carney, in his own name, on April 16th, 1919,
for cable lines between Brazil and the Island of Cuba. Mr. Carney in
asking for this concession was acting as the representative of his
Company and followed the method suggested
[Page 197]
by His Excellency, the Minister of Viagao, in
regard to the concession for cable lines to the River Plate, to
which reference is made above. I have the honor to hand you as a
third enclosure a copy of an unofficial communication which I
addressed on May 22nd, 1919, to His Excellency, the Minister of
Viação regarding the registration of this contract,6 which resulted in a request
from him to the Tribunal de Contas to reconsider the subject of
registration.
In view of the deep interest, which my Government is evincing in
regard to increasing cable communication between Brazil and the
United States, I have the honor to ask the good offices of Your
Excellency,
- First, in assisting the Embassy to secure a concession
from the Government of Brazil for the Central and South
American Telegraph Company, in the name of Mr. Frank Carney,
for separate cables from Rio de Janeiro and Santos to the
River Plate, and
- Secondly, in assisting the Embassy to obtain the
registration by the Tribunal de Contas of the concession
which was granted Mr. Frank Carney by the Government of
Brazil for cables between Brazil and the Island of Cuba on
April 16th, 1919.
I avail [etc.]
[Subenclosure]
Memorandum
For over fifty years the Government of the United States has been
lending its support to the attempts of American Companies to
establish a submarine cable that would directly connect the United
States of America and Brazil independent of foreign lines. There
have been long and persistent efforts to accomplish this object.
Several telegraph monopolies granted by the Government of Brazil to
other countries since the birth of the Republic, have had the effect
of thwarting all attempts made by Americans to obtain a
concession.
Finally, after prolonged litigation ending at the Federal Supreme
Court, the latter rendered a decision, declaring that the term of
the monopoly had expired which so long had obstructed the proposed
extension of the submarine cables of the Central and South American
Company with terminus at Buenos Aires.
In accord with a request by the Government of the United States in
behalf of this Company, the Government of Brazil published decree
No. 12,599 of August 11th, 1917, granting to the above mentioned
Company, without monopoly or privilege of any sort, permission to
lay two submarine cables connecting separately the cities
[Page 198]
of Rio de Janeiro and
Santos with any part of the Republic of Argentina.7
The contract was duly signed by the Minister of Public Works, and by
the representative of the Company, after all legal requirements had
been met. It happened, however, that the “Tribunal of Contas”
refused to register this contract, owing to a clause which, contrary
to law, granted exemption from custom duties, also because the
Company had failed to obtain the necessary authorization to operate
in Brazil.
In a reply to the report of the “Tribunal of Contas”, the Company
expressed its willingness to eliminate the offending clause, but
took under advisement the matter of obtaining authorization to
operate in Brazil in order to legally close a contract with the
Federal Government, inasmuch as the referred permission was granted
the Company “for itself or any Company that it might organize”. It
appeared to the officials of the Company that a new Company must be
organized to lay the cables; in such event, the Central and South
American Telegraph Company would not operate in Brazil, and hence,
any authorization for such purpose would be unnecessary. The new
Company, once organized, would, of course, have to obtain permission
to operate.
A conference was held between the Ambassador of the United States and
the Minister of Public Works on September 11th, 1918, at which the
latter stated that it would be inconvenient to revise the clauses of
the signed contract, since these had been arranged at the Company’s
request.
The Minister of Public Works then suggested that the representative
of the Company should be authorized to ask in his own name a
concession for laying the proposed cables. In the drafting of the
new contract, the exemption-from-duty clause would be eliminated as
well as other objectionable clause[s].
The outbreak of the war made it impossible to purchase cables
necessary to carry out the project, and the Central and South
American Telegraph Company failed, for the time being, to take
advantage of the recommendation of the Minister of Public Works.
However, as soon as the manufacture of cables could be resumed, the
Company authorized its representative in Brazil, Mr. F. Carney, to
ask the proposed concession in his own name. A large order was
placed for cables to be laid between the cities of Rio de Janeiro
and Santos, and the Rio da Prata, (Montevideo and Buenos Aires).
These cables which are now being manufactured, represent an
expenditure of about twenty five thousand contos de reis (about
$6,250,000.00 in
[Page 199]
American
currency), and if the Government of Brazil should fail to authorize
the laying of these, a heavy loss would be sustained. Either the new
concession should be approved, or decree No. 12,599 of August 11th,
1917, should be accepted, after due modification so as to have it
registered by the “Tribunal of Contas”.
In accordance with authorization received by the representative of
the Company, Mr. Carney presented in his own name, on April 15th,
1919, a request, for permission to lay the cables, leaving to the
Government of Brazil to decide how the existing clauses of decree
No. 12,599 should be made acceptable (with exclusion of clause of
exemption custom duties), or whether such clauses as have recently
appeared in other similar contracts should be approved, granting the
term of one year for laying the cables.
The American Embassy in Rio de Janeiro is informed that the
Government of Argentina has recently granted permission to the
Central and South American Telegraph Co., to lay one or more cables
between Buenos Aires and Montevideo, the Company having already
obtained authorization from the Government of Uruguay to land its
lines in that country. The Company has a representative in
Montevideo who is now conducting negotiations with that Government
to obtain the right to land cables from Brazil. These negotiations
are well under way.8
In addition to these two cables between Rio de Janeiro and Santos,
and the Rio da Prata, the same Company has planned to lay another
cable between Rio de Janeiro and the island of Cuba. To this end,
Mr. Carney, representative of the Company in Brazil, was duly
authorised to request, in his own name, a concession from the
Government of Brazil. This concession consists of decree No. 13,524
of March 26th, 1919, and of a subsequent contract signed on April
16th.
On May 9th, the “Tribunal of Contas” refused to register the latter
contract, because it did not include a statement of the law upon
which, it is based, namely: Article 131, of law No. 2,924 of January
5th, 1915.
The Minister of Public Works subsequently requested the “Tribunal of
Contas” to reconsider its decision, and there the matter rests.
The Government of the United States has expressed the hope of an
early decision of the “Tribunal of Contas” in accord with its
verdicts in similar cases of recent years.
[Page 200]
The realization of the two projects mentioned in this memorandum,
which requires the expenditure of enormous capital, will facilitate
to a marked degree the telegraphic communications between the
various American countries at a time when the commercial and
industrial life of those nations are attracting general
attention.
The war clearly proved the inadequacy of our present means of
telegraphic communications. The Government of the United States will
appreciate any effort that the Government of Brazil may make toward
the realization of the two actual projects which have enlisted the
good offices of the Government at Washington for many years.
