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14. Mr. Burbridge. On January 3, 1952, the Spanish Government replied to the representations which we had made in respect of Barcelona Traction, refusing to admit that there had been a breach of treaty provisions in the treatment of this Company as we had alleged.44 The Note set out certain legal arguments in support of the Spanish view which we do not regard as sound. It made no reference to the suggestion which had been put forward that the Spanish Government might propose some method whereby the dispute might be resolved, whether by arbitration or otherwise. On January 4 the assets of the companies in Spain were sold at public auction for a nominal sum but subject to the obligation of payment off of the bondholders. The purchaser was a newly established Spanish company, set up by the Mare interests. This company is proceeding with arrangements for payment off of the bondholders which in accordance with the conditions of sale is to be completed by May 28, 1952. The Receiver for the Company has been in Spain and has attempted unsuccessfully to bring the parties together to negotiate a settlement. These efforts are being continued. We are informed that the Belgian Government has also made an approach to the Spanish Government in the hope that some settlement might be achieved. The Belgian Government has taken no further action to press the Spanish Government to submit the matter to arbitration, but has stated that if negotiations for a settlement are unsuccessful it may again press its claim to have the matter settled under the treaty for arbitration between Belgium and Spain. A further short Note has now been sent by us to the Spanish Government which restates briefly our view that the treatment accorded to Barcelona Traction in Spain is contrary to treaty provisions and refers once again to our previous suggestion that the Government of Spain might propose some method whereby the difference of opinion in this aspect of the matter might be resolved and that we would agree to take the matter to arbitration if necessary. Before sending this Note careful consideration was given to our present position in this matter and it was discussed with the Department of Trade and Commerce. The Department of Trade and Commerce expressed some concern that our representations in the Barcelona dispute might have harmful effect upon our relations with Spain in respect to other negotiations in which they were concerned. It was our own view that we have now done nearly all that is possible in this matter and that we would not be justified in pressing it further. It was felt, nevertheless, that the latest Spanish Note could not be allowed to go by default. It is not considered that the Spanish Government will give favourable consideration to our suggestion that a settlement might be discussed and the Note now sent will likely be our last effort in this matter. The Receiver of the Company has been informed that it is most unlikely that the Department can be of any further assistance in this matter and that he should continue his efforts to impress upon the Company the necessity to endeavour to negotiate a settlement with the bondholders.

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