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(EnclosureTelegram] The London Representative of the Standard Oil Company of New

Jersey (Montagu Piesse) to the President of the Company (W.C. Teagle)

LONDON, December 12, 1922. Harrison reports following agreement has been reached today between the Anglo Persian Oil Co. Ltd., and Anglo Saxon subject to agreement by other parties interested that participation of Turks (Turkish ?) Petroleum Company in the future shall be altered as follows Anglo Saxon 24% French 24% American 24% Anglo Persian Oil Co. Ltd. 24% Gulbenkian 4% last non-voting; that the Anglo Persian Oil Co. Ltd. in consideration of the reduction of its present holdings to 24% be given agreement by the Turks (Turkish ?) Petroleum Company whereby Anglo Persian Oil Co. Ltd. to receive free of cost 10% of the crude oil produced from the concessions and deliverable to the Anglo Persian Oil Co. Ltd. free of charge into the main pipe-line at the field. Anglo Persian Oil Co. Ltd. to have the right have this oil transported through the pipeline at cost price taking into account reasonable amortization also interest 6% per annum on the pipe lines net capital account from year to year. Your agreement to above can only be accepted subject to proviso that State Department will acknowledge above satisfying American claims to participation in oil resources of Iraq and that State Department undertake not to question title of Turks (Turkish?) Petroleum Company also that they advise promptly their representative at Lausanne of agreement reached.

Harrison says above agreed with Anglo Saxon with utmost difficulty and trust to receive your prompt acceptance. He does not anticipate difficulty in getting acceptance of French and Gulbenkian. He asks that you get State Department through Lausanne to support strongly this arrangement to the exclusion of any other interests American or otherwise.

MONTAGU PIESSE

890g.6363 T 84/62 The Secretary of State to the President of the Standard Oil Company of New Jersey (W. C. Teagle)

WASHINGTON, December 15, 1922. MY DEAR MR. TEAGLE: I have received your letter of December 13th enclosing a copy of a cablegram from your London representative and quoting your reply thereto in regard to certain proposals of the present partners in the Turkish Petroleum Company, Limited. I have noted your reference, in the telegram quoted in your letter, to this Department's attitude towards the claims of the Turk

ish Petroleum Company, but in view of certain statements in your London representative's telegram of December 12th, I would again call your attention to this Government's correspondence with the British Government setting forth the Department's views as to the invalidity of concessions alleged to have been obtained in Mesopotamia by this Company.

From the memorandum of your London conversations, which you left with me some months ago and to which I referred in my letter of August 22nd, I understand that it is the view of the American group that all concessions now held, or which may be acquired in the future, by the Turkish Petroleum Company should be confirmed by the proper governmental authorities before any attempt is made at their development.

With respect to the statement in the telegram of your London representative as to the support of the proposed arrangement to the exclusion of other interests American or otherwise, permit me to say that such a suggestion is entirely inadmissible. I had understood that the proposed arrangement embraced all American companies which had expressed the desire to participate. As I said in my letter of August 22nd, it rests chiefly with American commercial interests themselves once the opportunity is offered through the application of the principle of the Open Door, to determine the extent and terms of their participation and to decide whether under existing circumstances an adequate opportunity is offered. This Department can never take the position that it will support at any time any arrangement to the exclusion of American interests. The Department's efforts are directed, as stated in my letters of August 22nd and December 2nd," to giving effect to the principle of the Open Door for American interests and not to the support of one American interest as against another or to the conclusion of any particular business arrangements. You will therefore understand that the Department cannot appropriately take the action suggested in your representative's telegram. I am [etc.]

CHARLES E. HUGHES

890g.6363 T 84/69 The President of the Standard Oil Company of New Jersey (W.C.

Teagle) to the Secretary of State

New YORK, December 22, 1922.

[Received December 26 (?).] MY DEAR MR. SECRETARY: Acknowledging the receipt of your favor of the 21st instant,"1 I beg to further confirm for your records the

" Not printed.

text of a cablegram which my office sent over my signature to our London representative, Mr. Piesse, at 2:40 p. m. on December 15th, reading as follows:

Referring to your telegram 12th this month and referring to your telegram 14th this month in conference today with Secretary of State, State Department reaffirms its position as being simply that of procuring Open Door for American enterprises, that is, an opportunity for Americans to deal with owners of rights whoever they may be on terms of equality with other nationals. Department will not intervene in manner or terms of dealing nor will it support any American Company or group of companies in preference to or in exclusion of any other American concerns. Before we discuss with American Group subject matters your telegrams above referred to and these views of State Department we suggest that you give above views of State Department to Anglo-Persian Oil Company Ltd. and advise me whether they are accepted as a modification of the terms stated in your telegram December 12th.”

On the 18th instant I received a reply from Mr. Piesse to the lastquoted telegram, as follows:

“Referring to your telegram 15th this month party here says attitude of State Department is a general one and not clearly understood by him can you elaborate it and state effects of specific case Turks (Turkish ?) Petroleum Company. Does State Department fully accept open door formula as agreed with you in July as satisfying claims of all American nationals other than those included in your group. Telegraph fully your views in time meeting of interested parties arranged for Wednesday.”

On the 19th instant Mr. Wellman 73 read Mr. Piesse's telegram last quoted over the telephone to Mr. Dulles,74 and also the proposed reply, with the suggestion that we would appreciate having the Department's criticism of our proposed reply before we should dispatch it. Later, on the afternoon of the 19th instant, Mr. Dulles called Mr. Wellman on the telephone and told him that he, Mr. Dulles, had conferred with you upon this reply and that in your opinion it fairly expressed the views of the Department. Thereupon the proposed reply was sent to Mr. Piesse in the same form in which it had been read to Mr. Dulles, which was as follows:

Referring to your telegram 18th this month State Department's views are that concessions for oil in Mesopotamia claimed by Turkish Petroleum Company are invalid. It is view of American Group that concessions so claimed must be confirmed by Iraq or other Government concerned before any attempt is made at their development. In case of conflict of interest between American Group through Turkish Petroleum Company possessing such confirmed titles and other American interests through so-called Chester or other claims State Department would remain neutral pending settlement of controversy by agreement or other procedure. If all Americans are united in a single claim which the State Department deems valid it would support such claim. Our American Group comprises all American oil companies now known to be potentially interested in Mesopotamia." Respectfully yours,

Guy Wellman, associate general counsel of the Standard Oil Co. of New Jersey.

* Allen W. Dulles, Chief of the Division of Near Eastern Affairs, Department of State.

W.C. TEAGLE

890g.6363 T 84/69

The Secretary of State to the President of the Standard Oil Company

of New Jersey (W. C. Teagle)

WASHINGTON, December 30, 1922. MY DEAR MR. TEAGLE: I beg to acknowledge the receipt of your letter of the 22nd instant confirming an exchange of telegrams with your representative in London with regard to oil rights in Mesopotamia and the principle of the Open Door. I understand that Mr. Wellman has had telephone interviews with Mr. Dulles in which further inquiries have been made. Referring to these inquiries permit me to say:

The position of the Department has already been fully set forth and I do not see how it can be misunderstood.

This Government does not recognize the claim of the Turkish Petroleum Company to a concession in Mesopotamia as valid, and the reasons for this position have been set forth in our correspondence with the British Government. It has also been suggested that in case rights are asserted under this alleged concession, the Department would favor an appropriate arbitration of the merits of the question.

This Department cannot concern itself with any efforts that may be made to obtain a confirmation of the concession from any government competent to give such a confirmation. In case a confirming grant were made the Department's attitude with respect to it would be precisely the same as it would be in relation to any other grant. The grant might be contested or it might not be contested; it might have been validly made or there might be questions relating to its validity. If there were a contest or questions raised as to its validity, these, unless palpably without foundation, would of course have to be decided by some competent tribunal. The Department could not undertake to be that tribunal, and in case there were competing American interests and a claim urged on one side and denied on the other, the Department of course could not attempt to take sides in favor of one American interest against another. This is familiar policy.

The effort of the Department is to maintain the Open Door and suitable opportunity for American enterprise. It is left to the American companies and individuals who are interested to take advantage of the opportunities that are offered and to promote their interests in any proper way. The Department is always willing and desirous of giving proper diplomatic support to American interests, but if there are questions underlying the title and competing American claims, you will readily understand that this Government cannot associate itself with one set of American claims as against another. In such matters it would desire a prompt and effective disposition of claims by competent tribunals. Sincerely yours,

CHARLES E. HUGHES

DISCRIMINATION IN INDIA AGAINST AMERICAN OIL COMPANIES *

845.6363/15

The Standard Oil Company of New York to the Secretary of State

NEW YORK, February 24, 1922.

[Received February 28.] SIR: From statements that have been published in the press, it would appear that a recent visitor to this country, who holds a high place in British oil circles, is endeavoring to create the impression that the British Government does not discriminate against other than British nationals in granting concessions for the production of crude petroleum.

We have laid before you from time to time as it came to us, evidence that the British Government follow a well defined policy of discrimination and that, insofar as India and Burma are concerned, this discriminatory policy has been in force for thirty-eight years.

In view of the statements that are now being made denying the existence of a policy of discrimination, we trust that you will not consider it out of place if we, in refutation of these statements, review our records of the discriminatory acts we have experienced at the instance of British officials, together with other direct evidence that has been reported to us by our representatives abroad.

On March 20th, 1902, the Colonial Oil Co. of New Jersey,-a subsidiary of the Standard Oil Co. (N. J.), applied to the Govern

# For previous correspondence relating to this subject, see Foreign Relations, 1921, vol. II, pp. 71 ff.

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