852.6363/65
The Ambassador in Spain (Hammond) to the Secretary of State
[Received October 10.]
Sir: I have the honor to confirm my telegram No. 96, of September 22, 1927, 5 p.m.,15 regarding the acceptance on September 21st last by the Examining Committee and the Minister of Finance of the tender for the petroleum monopoly, to be constituted in accordance with the Royal Decree of June 28, 1927, submitted by the Banco Urquijo group (comprising, as the Embassy understands, the following banks: Urquijo, Hispano Americano, Bilbao, Vizcaya, Herrero, Cataluña, Hispano Colonial, Marsans and Español de Credito). While Ambassador Padilla15a yesterday confirmed the above information, no official announcement has been made as yet and none is expected for a few days until the final decision of the Council of State has been made.
In this connection, it may be of interest to the Department to know that I received a visit not long ago from Mr. John Walsh, brother of Senator Walsh of Montana, who came with a circular letter of introduction from the Secretary of State, to discuss with me the aspirations of the American Republics Corporation (incorporated in the State of Delaware), of which Mr. Walsh is General Counsel. He informed me that the firm of Sabadell and Henry, of Barcelona, refiners of oil supplied by the American Republics Corporation, hopes to refine the oil for the petroleum monopoly, in which case, a contract is to be made with the Petroleum Export Corporation, a subsidiary of the American Republics Corporation above mentioned and guaranteed by them, to furnish crude oil for refinement.
On September 22d last the Embassy received information from the British Embassy that the latter has requested an interview with General Primo de Rivera for Mr. Wescott, representative of the Shell Oil Company of Spain, for some time after September 26th next, at which audience, the British Embassy stated, Mr. Brewster, Managing Director of the Babel and Nervion Company in Spain, a subsidiary of the Standard Oil Company of New Jersey, likewise desired to be present, which might indicate that an understanding has been reached between these two important British and American petroleum [Page 671] interests with regard to the policy to be pursued in relation to the oil monopoly. Up to the present time, however, the Embassy has received no request from Mr. Brewster to obtain an audience for him with General Primo de Rivera.
The Department will recall, regarding the above, that, as reported in my telegram No. 89, of August 29, 1927, 5 p.m., and my despatch No. 487, of August 29, 1927,16 that the Board of Directors of the Babel and Nervion Company decided to desist from making further diplomatic protests against a fine imposed upon it by the Spanish Government, and to pay the fine as imposed in the hope of thereby obtaining a more favorable position in connection with possible relations with the Spanish oil monopoly.
I have [etc.]