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for the reason that the cable which the Company desired to lay was to connect the United States with Brazil where the Western Telegraph Company, Limited, with which the Western Union Telegraph Company had associated itself in the enterprise, asserted exclusive privileges.

The suggestion made in the Foreign Office note that it was inconsistent to grant to All America Cables, Incorporated, a license to land a cable in the United States when the company possessed exclusive privileges on the west coast of South America, and that an arrangement for the mutual waiver by All America Cables and the Western Telegraph Company was made after informal discussions during the Disarmament Conference, is noted. The Foreign Office is correct in its understanding that All America Cables, Incorporated, surrendered such exclusive rights as it possessed on the west coast of South America. However, the impression that the plan for the mutual surrender by All America Cables and the Western Telegraph Company was in any way related to informal discussions whích took place during the Disarmament Conference is inaccurate.

On July 15, 1921, the Western Union Telegraph Company made application for a license to land a cable at Miami Beach, pursuant to the provisions of the Act of Congress, approved May 27, 1921. The application was the subject of a series of conferences at the Department of State in which representatives of the Western Union Telegraph Company and of All America Cables participated. As a result of these conferences, the plan of mutual waiver of exclusive privileges was developed, and on December 6 [8], 1921, a draft license contemplating a mutual waiver was handed to the representatives of the Western Union Telegraph Company.14 One of the conditions of the proposed license required the Western Union Telegraph Company to subscribe to a declaration that it was not associated and should not associate with any foreign company or concern having in Brazil or elsewhere in South America rights of entry, connection or operation denied to any American cable company. This condition the Western Union Company could not accept until the Western_Telegraph Company effectively waived its exclusive privileges in Brazil and elsewhere in South America. To place the Western Union Telegraph Company in a position to accept the proposed license, it was arranged with representatives of the Western Union Telegraph Company and All America Cables that All America Cables and the Western Telegraph Company should adopt resolutions waiving in favor of American and British cable companies any exclusive rights of entry, connection or operation of submarine cables which they possessed in South America. As indi. cated, the plan for the mutual waiver of exclusive privileges was not in any way related to informal discussions between representatives of the United States and the British Government during the Disarmament Conference. However, the Government of the United States understands from the comment made in the Foreign Office note that His Majesty's Government acquiesced in the plan for mutual waivers. This information is gratifying to the Government of the United States.

14

See telegram no. 3, Feb. 4, 1922, to the Chargé in Argentina, vol. I, p. 518.

It may be explained in relation to comments made in paragraph four regarding action taken by the Argentine Government with respect to the resolution adopted by the Western Telegraph Company, Limited, to waive its exclusive privileges in South America that the communication of the Argentine Government, to which reference is made in Sir William Tyrrell's note, related to the laying of cables and not in terms to other preferential privileges which the Western Telegraph Company secured by contract with the Government of the Argentine Republic. Article XIII of the contract between the Company and the Government, concluded June 3, 1909,15 obligated the Government to send over the lines of the Western Telegraph Company official telegraphic communications with Europe, North America and Africa and private messages not otherwise expressly routed. Inasmuch as the communication of the Argentine Government, to which reference has been made, apparently related only to the matter of laying cables and since Article XIII of the concession seemed to provide for the enjoyment by the Company of other preferential privileges, it was deemed necessary to obtain an expression from the Argentine Government relating to these other preferential privileges.

It seems from the fifth and sixth paragraphs of Sir William Tyrrell's note that notwithstanding the explanation which was made in the Embassy's note of July 24th to the Foreign Office it is not yet clear to His Majesty's Government why a license was not issued to the Western Union Telegraph Company for the landing at Miami when the Western Telegraph Company presented its resolutions of waiver to the governments of the countries in South America in which preferential rights were asserted. As stated in the Embassy's note of July 24th, the waivers of All America Cables and the Western Telegraph Company became effective upon the acquiescence of the South American governments concerned. It was, therefore, deemed necessary to withhold granting the license until all the South American governments had acquiesced in the waivers.

It is noted from the seventh paragraph of the note that His Majesty's Government does not consider objectionable the acquisition under certain conditions of exclusive rights which serve as inducements to the extension of business to points where traffic would not be immediately remunerative. The Government of the United States does not understand that it is contended that it is necessary for cable companies to possess exclusive privileges in South America to make cable traffic between the United States and South America remunerative, nor is it understood that the question of exclusive privileges in the Azores is presented by the applications of American companies for licenses to land and operate cables there. Therefore, it is not perceived that the question whether the acquisition of exclusive rights as an inducement to lay cables to points where the traffic would not be remunerative is objectionable or warranted is material to the present discussion.

It is assumed that in mentioning in the eighth paragraph of the note representations which had been made to the Government of

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the United States regarding losses sustained by the British company as a result of the delay in landing the cable at Miami Beach, it was intended to refer to the note which His Excellency Sir Auckland Geddes addressed to the Secretary of State on July 27, 1921.16 This note was answered on October 31, 1921.16

Sir William Tyrrell states in paragraph nine of the note of August 18th that requests by cable companies to land cables on British territory will in the future, as in the past, be considered on their merits; that the merits of such requests have hitherto been considered merely from the commercial point of view and that His Majesty's Government would be loath to introduce other factors into consideration. It is this willingness of His Majesty's Government to consider on their merits requests for permission to land and operate cables in British territory that, as indicated in this Embassy's note of July 24th, the Government of the United States is unable to reconcile with the apparent purpose of His Majesty's Government to oppose, regardless of their merits, applications of American cable companies for permission to land cables at the Azores.

In paragraph 10 of Sir William Tyrrell's note it is stated with reference to section 2 of the Act of Congress approved May 27, 1921, that if the refusal to issue the license for the landing of the cable at Miami is an example of an application of that section, it is not clear how it can be employed to obtain for American cable companies greater facilities in Great Britain than they already enjoy: As has been indicated in previous communications and emphasized in this note, the purpose of the Government of the United States in withholding permission to land the cable of the Western Union Telegraph Company at Miami Beach was to cause the Western Telegraph Company to surrender its monopolies the existence of which rendered it impossible for American cable companies to obtain privileges similar to those enjoyed by that company with which the Western Union Telegraph Company had associated itself for carrying cable traffic between the United States and Brazil. The delay in granting the license was not intended to have any relation to facilities granted to American cable companies in Great Britain. Happily it has not been necessary to invoke the long standing practice of this Government or the provisions of the Act of May 27, 1921, in behalf of American cable companies seeking privileges in His Majesty's domain.

As His Majesty's Government is aware, telegraph lines in the United States are operated by private companies which compete not only for domestic business but also for international traffic. Neither American telegraph companies nor American cable companies have been granted monopolies in the United States. It is well known that companies which have landed cables on the shores of the United States own and operate extensive telegraph systems in the United States and maintain offices and deal directly with the American public.

In encouraging and supporting American companies in extending their systems so as to provide better facilities and services, the United

10 Not printed.

17

States Government does so without any intention whatever of interfering with similar development and extension of British communication facilities. The United States Government clearly recognizes the importance to the British Empire of extensive cable systems throughout the world and has no disposition to interfere with the maintenance or development of such systems. The United States Government favors the widest possible development of international communication facilities and services and desires that American enterprise be accorded the same freedom in extending and developing communication facilities as the cable companies of other nationalities enjoy. The Government of the United States is ready at any time to discuss with His Majesty's Government any question which arises in which the United States and Great Britain are con. cerned. As indicating the attitude of the American Government, you will recall that at the Washington Conference on Communications the American delegation offered to enter into an arrangement which would make possible wide use of American territory for cable relay purposes."

In conclusion, I beg to state that while the Government of the United States desires that His Majesty's Government understand the general policy to which the Government of the United States has adhered in relation to applications for permission to land cables to connect the United States with foreign countries and has endeavored clearly to explain that policy and its application to the effort of the Western Union Telegraph Company to obtain permission to land its cable at Miami Beach, I am directed to observe that there is not perceived in the attitude of the Government of the United States with respect to landing cables on the shores of the United States any relation to the attitude which His Majesty's Government has adopted toward the landing of cables in Portuguese territory or any justification for the action of His Majesty's Government in opposing the efforts of American companies to obtain cable facilities in territory over which His Majesty's Government does not have jurisdiction. It is hoped that the opposition which His Majesty's Government has deemed it proper to exert against the applications of American companies for concessions to land and operate cables in the Azores may not longer be maintained.

The Department desires to receive from you a copy of the communication which you send to the Foreign Office pursuant to this instruction and copies of the correspondence with the Foreign Office mentioned therein and of other notes exchanged on this subject which have not previously been forwarded to the Department. The Department desires a complete file of this correspondence in order that it may be published or submitted to Congress if such a course should be deemed desirable. I am [etc.]

CHARLES E. HUGHES

See section entitled “Failure to Secure Ratification of the Cable Agreement between the United States, Great Britain, and Italy, etc.”, vol. I, p. 538.

DISPUTE WITH THE BRITISH GOVERNMENT OVER WITHDRAWAL OF RECOGNITION OF AMERICAN CONSULAR OFFICERS AT NEW. CASTLE-ON-TYNE

123 sl 1/79a : Telegram The Secretary of State to the Ambassador in Great Britain (Harvey)

WASHINGTON, July 20, 1922—3 p. m. 217. British Embassy announces intention of British Government to withdraw exequaturs of Consul Slater and Vice Consul Brooks at Newcastle-on-Tyne on the ground that they have attempted to divert passengers from British to American lines by making difficulties over visas for passengers not traveling by American lines and hinting that inconvenience might be encountered in the United States unless passengers should travel by American lines. In order that nature of action and reply to British Embassy may be intelligently considered you are requested to telegraph a brief statement of the facts as understood by the officers named, adding your own comment and that of Consul General.

HUGHES

123 SI 1/80 : Telegram

The Ambassador in Great Britain (Harvey) to the Secretary of State

LONDON, July 26, 1922—2 p. m.

[Received July 26–9:58 a. m.] 312. Your 217, July 20, 3 p. m. Investigation now proceeding. Embassy has informally communicated to the Foreign Office its assumption that actual withdrawal of recognition will not be proceeded with until opportunity has been given to develop and confirm pertinent facts.

HARVEY

123 S1 1/81 : Telegram

The Ambassador in Great Britain (Harvey) to the Secretary of State

LONDON, July 29, 1922–1 p.in.

[Received July 29—12:12 p.m.) 321. My telegram number 312, July 26, 2 p. m. On receipt of Department's telegram 217, July 20, 3 p. m., Embassy requested consul general to undertake thorough investigation and he accordingly despatched Consul Reed under instructions to obtain exact facts and consult all parties involved. Reed's report which has just been made and which is supported by signed affidavits is being sent by the pouch together with consul general's comment.28 It completely ex

Despatch and enclosed report not printed.

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