352.1153 St 2/105: Telegram
The Acting Secretary of State to the Ambassador in Spain (Hammond)
54. Your 78, August 24, 3 p.m. The Department is distinctly disappointed by the failure of the British Government and the Shell group to stand with the French and American Governments and oil companies. The Department is constrained to believe that a secret agreement of some sort has been reached (see Marriner’s letter to Whitehouse)43 and in this connection would be interested to know whether Shell still considers itself bound by its agreement with the Standard Oil a year ago not to sell oil directly or indirectly to the monopoly.
Please discuss situation with your French colleague and endeavor to ascertain what line the French Government proposes to take under the present circumstances. The French Government, thanks to its treaty relations with Spain, appears to have a strong case irrespective of Shell’s action, and should it continue to press its claims in the manner it has in the past this Government would be disposed to follow with it assuming, of course, that the American oil companies continue to decline to make terms on the basis of the Shell settlement. If France should decide to follow the example of the British this Government would probably find it difficult to maintain its present stand unless the attorneys for the American oil companies can present a very solid legal claim based on well recognized precedents of Spanish law and practice.
Standard Oil is consulting with the French companies to ascertain their views, and as soon as definite information has been received as to their attitude and that of the French Government it is expected that the Department and Standard Oil will confer upon the course of action to be followed regarding which instructions will be sent to you.
Mail cipher copies to London and Paris.
- Not printed.↩