852.75 National Telephone Company/168
The Chargé in Spain (Flack) to the Secretary of State
[Received May 6.]
Sir: With reference to previous despatches on this subject, I have the honor to enclose in copy and translation the draft of a project of law15 presented to the Cortes by Rafael Salazar Alonso, a Radical Deputy, calculated to abolish the exemptions from municipal and provincial taxation which was granted in Section 6 of the Telephone Contract.
The Bill has not been discussed as yet but with the reconvening of the Cortes on April 25 it stood No. 20 on the Order of the Day. Whether it will ever be discussed is problematical. Captain Rock of the Telephone Company entertains the hope that it will not reach discussion in the Cortes. He states that his conversations with Prime Minister Azaña reveal that the latter is not anxious to have the Bill reach discussion, but has no power to prevent the introduction of such a Bill. If it should reach the point of imminent discussion, the Prime Minister will probably announce in the Cortes that the matter bears on the Telephone Contract and remind that body that the matter of the revision of the contract was being considered by the Committee appointed for that purpose. This might precipitate a meeting of the Committee before Mr. Polk, Chairman of the members selected by the Company for that purpose, could reach Madrid. In that event, I understand the Company will, through its two designated members now in Madrid, ask the Government to present a plan which will be carefully answered by them in writing, thus giving Mr. Polk time to reach Madrid.
In the event that the Bill comes to a point where it is likely to be discussed in the Cortes, it may be useful to remind the Minister of State that in his letter of December 9, 1932, to the Ambassador he confirmed the Government’s criterion of “joint examination” (see enclosure No. 6 with despatch No. 996 of December 13, 1932),15 Such a step might conceivably strengthen the Prime Minister’s position in endeavoring to remove the Telephone matter from Cortes discussion and would merely [Page 701] amount to the reiteration of a principle already accepted by the Spanish Government in the matter. In agreement with Captain Rock, I am prepared to take this step at any moment if the matter should develop.
Respectfully yours,