835.73/132a: Telegram
The Secretary of State to the Chargé in Argentina (White)40
3. A settlement of the controversy arising out of effort of Western Union Telegraph Company to land its Miami-Barbados cable without [Page 519] the consent of this Government at Miami, Florida,41 has now been tentatively arranged on the basis of the following condition as set forth in the draft license handed on December 8th to the representatives of the Western Union and the All America Cable companies:
“That the licensee is not and shall not be associated with any foreign company or concern enjoying in Brazil, or elsewhere in South America, rights of entry, connection, or operation, denied to any American cable company; provided, however, that should the licensee desire to associate itself with any foreign company or concern enjoying in Brazil or elsewhere in South America rights of entry, interport connection or operation which are denied to any American cable company, and said foreign company or concern is willing to surrender such exclusive privileges in case exclusive privileges of similar character enjoyed in South America by any American cable company are likewise surrendered and should such American cable company be unwilling to surrender the same, then and in that event the licensee may apply to the, President for abrogation or modification of this condition.”
The All Americas at that time and subsequently the Western Telegraph Company, Limited, through the Western Union, expressed their willingness to waive their exclusive privileges and in order to make it possible for the Western Union to accept the first condition of the draft license and to thereafter secure the consent of the President to land their cable at Miami, it was agreed that the Western Company and the All Americas should pass corresponding resolutions surrendering the exclusive rights held by them respectively in South America, in favor of American and British cable companies. These resolutions were then to be exchanged in the presence of an officer of the State Department, and a date fixed for their presentation by the local representative of the companies to the Governments of the South American countries concerned, requesting the said Governments formally to notify their acquiescence in the said waiver to the American diplomatic representatives accredited to them respectively. The latter were thereupon to transmit such notification received by them by telegraph to the Department which would then be in a position to recommend the issuance of a license by the President. This procedure is now being carried out.
On January 25th the following resolution was passed by the Western Telegraph Company, Limited:
“The Western Telegraph Company, Limited. Meeting of the Board of Directors of the company held at the company’s offices, Electra House, Moorgate, London, on the 25th January 1922. Minute number 7648. Telegrams exchanged with Mr. Carlton, Washington, since the last meeting of the board, regarding the surrender of preferential or exclusive rights held by the Western Telegraph [Page 520] Company and the All America Cables, Incorporated, were considered and it was
Resolved: Whereas, the Western Telegraph Company, Limited, enjoys or claims certain preferential or exclusive rights of entry, connection or operation of submarine cables in the Argentine Republic, Brazil and Uruguay; Whereas, the All America Cables, Incorporated, enjoys or claims certain preferential or exclusive rights of entry, connection or operation of submarine cables in Colombia, Ecuador and Peru, and whereas, it has been arranged that the Western Telegraph Company, Limited, and the All America Cables, Incorporated, shall renounce all such preferential or exclusive rights; now, therefore, be it resolved that the Western Telegraph Company, Limited, agrees to renounce, waive, relinquish and surrender in favor of American and British cable companies only, any preferential or exclusive rights of entry, connection or operation of submarine cables now enjoyed or claimed by it in the Argentine Republic, Brazil and Uruguay or elsewhere in South America. However, the Western Telegraph Company, Limited, does not give up its rights of entry, connection or operation of submarine cables but gives up only the preferential or exclusive features of such rights in favor of American and British cable companies. Provided, that this renunciation, waiver, relinquishment and surrender shall become effective upon the presentation to the Department of State of the United States in behalf of the All America Cables, Incorporated, of a corresponding resolution renouncing, waiving and surrendering any exclusive rights of a similar character which it enjoys or claims in Colombia, Ecuador and Peru or elsewhere in South America, and upon the acquiescence in the renunciation, waiver, relinquishment and surrender of the Western Telegraph Company, Limited, by the governments of the Argentine Republic, Brazil and Uruguay and the acquiescence in the renunciation, waiver, relinquishment and surrender of the All America Cables, Incorporated, by the governments of Colombia, Ecuador and Peru. And be it further resolved, that a copy of this resolution shall be transmitted to the Department of State at Washington and to the governments of the Argentine Republic, Brazil and Uruguay.”
A corresponding resolution, mutatis mutandis, was adopted by the Board of Directors of the All America Cables, Incorporated, on January 30, 1922. The resolutions were examined by the representatives of the Western Union, acting for the Western Company, and of the All Americas in the Department on January 31st, and February 7 was fixed for the presentation of the resolutions to the South American Governments concerned. There may be a few days delay in presenting the resolutions in Bogota and Quito.
After notification to your British colleague and to yourself, the resolution of January 25th will be presented to the Argentine Government by the representative of the Western on Tuesday, February 7th. You are requested to keep the Department promptly informed and to telegraph the text of the formal concurrence of the Argentine Government as soon as it is received by you.
[Page 521]The Department hopes that this solution of the controversy will commend itself to the Argentine Government. It is believed that in removing restrictive monopolies the door will be opened to free and healthy competition and to the establishment of additional cable facilities between North and South America and between the countries of South America, reduction of rates, closer business relations, increased press traffic, and freer exchange of ideas, and bring closer together the peoples of the Western Hemisphere.
[Paraphrase.] The Department’s endeavor throughout, as you can easily understand, has been to make possible the extension by American cable companies of their existing systems in South America through the elimination of the monopolies enjoyed by the British Company. Therefore you are to ascertain to your satisfaction that the Argentine Government has acquiesced in proper form and in such a way that the All America Company will, should it so desire, be able to extend its system and operations in Argentina, and that no other American companies will be kept out of the country because of any existing exclusive privileges enjoyed by the Western Telegraph Company. The Department relies on your good judgment to see that the interests of American cable companies in this matter are amply protected.
Repeat to the Legation at Montevideo, this date, as Department’s telegraphic instruction no. 2, mutatis mutandis. [End paraphrase.]
- The same, mutatis mutandis, to Brazil (no. 10), with the exception of the last paragraph (file no. 832.73/209a). See last paragraph for instructions to repeat to Montevideo as no. 2.↩
- See Foreign Relations, 1921, vol. i, pp. 815 ff.↩