352.1153 St 2/43: Telegram
The Chargé in Spain (Blair) to the Secretary of State
[Received 7:55 p.m.]
27. Reference Department’s 17, February 14, 6 p.m.
(1) The official British attitude remains unchanged, but I am told by the Shell representative that in the near future stronger support is very probable. In retiring from the Valuation Commission, the Shell representative made the strongest protest to Primo de Rivera, so far recorded, against unjust and arbitrary treatment.
(2) In considering the Valuation Commission’s attitude to the present, according to Spanish legal advisers of all the oil interests, the companies by refusing to participate in proceedings unless the Commission changes its attitude will strengthen instead of weaken their position. On this point I agree with the French Ambassador. The British company, moreover, assures me that it will not alter its attitude if it fails to receive positive assurances as to the Valuation Commission acting in an impartial and judicial capacity and at the same time interpreting the contracts for industrial value (mentioned in the tenth article of the June 28, 1927, royal decree) to mean both the value of physical property and of the earning capacity of going concertis which cannot be ignored. Ample precedents under Spanish law concerning forced expropriation exist to support this attitude, according to competent legal authorities.
A united front is now presented by the attitude of the companies; and the acceptance of the Spanish Finance Minister’s ultimatum (mentioned in 25, February 13, from this Embassy) will, I believe, weaken it.
(3) Eminent legal authorities argue that, under existing conditions here, testing the royal decree’s legality by bringing any suit in Spanish courts would be impractical. The terms of the decree deprive the interests involved of legal recourse save to the Council of Ministers of Spain; and it is probable that Spanish courts would refuse receiving an application for suit owing to their subservience to political pressure. While agreeing with this view, the French Ambassador acknowledges that further diplomatic representations would not be weakened if such suit were possible. My belief is that such suit is impractical, although it would strengthen diplomatic efforts.
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