to suggest a text different from that which has been proposed by the United States Government. On the hypothesis of this new draft being accepted His Majesty's Government would propose for the preamble of the African treaties the following text, mutatis mutandis:

Whereas for the purpose of giving effect to the provisions of article 22 of the Covenant of the League of Nations a mandate for the administration of part of the former colony of German East Africa has been entrusted to His Brittanic Majesty, and

Whereas the terms of the mandate in respect of this territory have been defined by the Council of the League of Nations as follows:

(Insert terms of mandate except the preamble)

and

Whereas His Brittanic Majesty has accepted the mandate in the above terms in respect of the aforesaid territory and has undertaken to exercise it on behalf of the League of Nations: and

Whereas the Government of His Brittanic Majesty and the Government of the United States of America are desirous of reaching a definite understanding as to the right of their respective Governments and of their nationals in the said territory:

His Brittanic Majesty and the President of the United States of America have decided to conclude a Convention to this effect and have nominated as their plenipotentiaries . . . . . . who . . . have agreed as follows:

I have [etc.]

CURZON OF KEDLESTON

NEGOTIATIONS BY AMERICAN OIL COMPANIES FOR A SHARE WITH OTHER FOREIGN INTERESTS IN EXPLOITING THE MESOPOTAMIAN OIL FIELDS 57

890g.6363 T 84/30

The British Ambassador (Geddes) to the Secretary of State

No. 99

WASHINGTON, 11 February, 1922. MY DEAR MR. SECRETARY: My attention has been called to an article which appeared on Page 12 of the International Petroleum Reporter of the 25th January 1922 and which reads as follows:

BRITISH GOVERNMENT HAS TURKISH Co. STOCK

Washington, Jan. 23, 1922.

"It will interest those who have given attention to the petroleum controversy between the United States and Great Britain, to know that the British one-quarter share in the Turkish Petroleum Co.,

For previous correspondence relating to petroleum exploitation in Mesopotamia, see Foreign Relations, 1921, vol. ш, pp. 80 ff.

which claims prior rights to valuable concessions in Mesopotamia, is held by the Board of Trade of the British Government. The Board's investment is £40,000 in a total paid in capital of £160,000.

The first payment on the Government holding, which amounted to 50 per cent. or £20,000, was made in January, 1919, and the balance in subsequent payments the last of which was made in July, 1921. British authorities have insisted their Government has no financial interest in the oil industry except in the Anglo-Persian Co.

The above is taken from an official British document, and is considered particularly significant in view of the fact that practically the entire dispute over Mesopotamia and her oil resources hinges around the Turkish concessions."

The suggestion in this article is that, apart from the shares which they own in the Anglo-Persian Oil Company (the circumstances of the acquisition and holding of which are already familiar to you), His Majesty's Government have an additional direct interest in the Turkish Petroleum Company to the extent of 25 per cent. of the stock of that concern, and that this alleged fact has influenced His Majesty's Government in giving support to the claim of the Turkish Petroleum Company to certain oil concessions in Mesopotamia.

In ordinary circumstances, I should not have considered it necessary to take any notice of such insinuations nor do I believe for a moment that the Government of the United States would attach any importance to them, but irresponsible statements of this character have given rise during the last few years to so many mischievous misapprehensions in the public mind in this country respecting the policy and actions of His Majesty's Government that it may be well to acquaint you with the true facts. I am authorized, therefore, by His Majesty's Principal Secretary of State for Foreign Affairs to inform you that in the year 1914, the stock of the Turkish Petroleum Company was distributed as follows:

1. The d'Arcy Exploration Co. (a subsidiary of the AngloPersian Oil Company) ..

2. The Anglo-Saxon Petroleum Co. (a subsidiary of the Royal Dutch Shell Co.)

3. The Deutsche Bank (German)

50%

25%

25%

.. 100%

During the war, the twenty five per cent interest in the Turkish Petroleum Company held by the Deutsche Bank passed into the hands of the British Public Trustee as Custodian of Enemy Property in the same manner and for the same purposes as all other enemy property situated in the United Kingdom passed into the hands of that official or as enemy property situated in the United States passed into the hands of the American Alien Property Custodian. This twenty-five

per cent. interest now stands in the name of Sir H. Lamb,58 the nominee of His Majesty's Government in much the same way and for the same purposes as enemy property in this country was and is vested in various Trust Companies formed by the Alien Property Custodian. It is to be transferred to French interests under the provisions of the San Remo Oil Agreement 50 with which you are familiar and there has never been any intention on the part of His Majesty's Government of holding it permanently.

59

Apart from that former German holding which, as I have said is to be handed over to the French, His Majesty's Government have no holding in the Turkish Petroleum Company nor in any other Petroleum Company whatever with the sole exception of the Anglo-Persian Oil Company.

Believe me [etc.]

A. C. GEDDES

890g.6363 T 84/30

The Acting Secretary of State to the British Ambassador (Geddes)

WASHINGTON, February 27, 1922. EXCELLENCY: I have the honor to acknowledge the receipt of your note No. 99 of February 11, 1922, quoting an article which appeared in the International Petroleum Reporter of January 25, 1922, relating to the ownership of stock in the Turkish Petroleum Company. You state that in 1914 fifty per cent. of the stock of this Company was held by the D'Arcy Exploration Company, a subsidiary of the Anglo-Persian Oil Company, twenty-five per cent. by the AngloSaxon Petroleum Company, and twenty-five per cent. by the Deutsche Bank, that during the war the twenty-five per cent. interest held by the Deutsche Bank passed into the hands of the British Public Trustee as Custodian of Enemy Property, that this twenty-five per cent. interest now stands in the name of a nominee of the British Government, that it is to be transferred to French interests under the provisions of the San Remo Petroleum Agreement, and that there has never been any intention on the part of the British Government of holding this interest permanently.

It appears that a representative of the International Petroleum Reporter recently inspected at the Department of Commerce a White Paper, entitled "British Government Investments in Registered Companies," which by order of the House of Commons, November 10, 1921, has been printed and published. According to this document, the British Board of Trade had invested up to September 30,

68

In a note from the British Embassy dated March 28, the name is corrected to "Mr. Launcelot Smith." (File no. 890g.6363 T 84/32.)

1921, the sum of £40,000 in shares of the Turkish Petroleum Company. It is reasonable to suppose that the article in question may have been based upon this information, and this Government, of course, is not responsible in any way for the version which appeared in the press.

I understand that a report of the Turkish Petroleum Company, issued as of December 20, 1921, contains information regarding the share holdings in the company. It occurs to me that you may wish in the light of this report to give me a further and perhaps more specific statement of the present situation. If you care to do this, I shall be glad to take whatever action may seem appropriate for the purpose of removing any public misapprehensions which may possibly have arisen.

60

I must add, however, that in the light of the correspondence which has been exchanged between our two Governments on the subject of equality of opportunity in the mandate territories, and particularly the claims of the Turkish Petroleum Company in Mesopotamia, the meaning of your statement that the twenty-five per cent interest held by a nominee of the British Government is to be transferred to French interests under the San Remo Petroleum Agreement is not entirely clear. You have in mind, apparently, the provisions of that Agreement which, without mentioning the Turkish Petroleum Company, make certain references to Mesopotamian oil. As you are aware, however, the San Remo Petroleum Agreement has not been recognized by this Government as applicable to the disposition of economic opportunities in mandate territories. Accept [etc.]

HENRY P. FLETCHER

890g.6363 T 84/36

The British Ambassador (Geddes) to the Secretary of State

No. 343

WASHINGTON, May 3, 1922. SIR: In the note which the Acting Secretary of State was so good as to address to me on February 27th, in regard to an article which appeared in the International Petroleum Reporter of January 25th, 1922, relating to the ownership of stock in the Turkish Petroleum Company, Mr. Fletcher referred to the sum of £40,000 which the British Board of Trade had invested in this Company up to September 30th, 1921. I have the honour to inform you that this holding of His Majesty's Government in the Turkish Petroleum Company is a temporary one, representing, as explained in my previous note of February 11th, (No. 99), the twenty-five per cent ex-German

60 See Foreign Relations, 1921, vol. п, pp. 106 ff.

share now standing in the name of a nominee of His Majesty's Government for ultimate transfer to French interests. It is represented by 40,000 shares of £1 each which are fully paid. I am prompted to repeat the above statement by a desire to dispel any possible misunderstanding on this particular point.

In the last paragraph of Mr. Fletcher's note referred to, reference was made by him to certain questions in connection with the mandate for Mesopotamia and the Turkish Petroleum Company. These questions are, I understand, being dealt with separately between the United States Ambassador in London and His Majesty's Principal Secretary of State for Foreign Affairs and His Majesty's Government feel that confusion might arise if they were to be discussed simultaneously between the State Department and this Embassy.

I have [etc.]

A. C. GEDDES

890g.6363 T 84/41: Telegram

The Acting Secretary of State to the Ambassador in Great Britain

(Harvey)

[Paraphrase]

WASHINGTON, June 24, 1922-3 p. m.

185. On June 22 Bedford 61 called at the Department on behalf of seven American oil companies which had conferred on June 20. In reply to his inquiry, the Department made a statement of its attitude toward negotiations between American and British interests on Mesopotamian oil. The following is the substance of the Department's statement.

In the correspondence on mandates this Government has contended and is contending for the broad principle of equality of commercial opportunity. The Mesopotamian oil question furnishes a test of the application of that principle. Any arrangement, therefore, which is not in agreement with that principle or which implies a repudiation of the view held by this Government that the Turkish Petroleum Co. has no valid concession in Mesopotamia, could not receive the approval of this Government. It is not the desire of the Department, however, to make difficulties or to prolong needlessly a diplomatic dispute or so to disregard the practical aspects of the situation as to prevent American enterprise from availing itself of the very opportunities which our diplomatic representations have striven to obtain.

A. C. Bedford, chairman of the board of directors, Standard Oil Co. of New Jersey.