No. 16.
Mr. Lee to Mr. Bayard.

No. 220.]

Sir: Referring to my dispatch No. 217, concerning our petroleum interests, I have the honor to report that I have had with Baron Pasetti, of the foreign office, a very pleasant interview, in which he showed great interest, and said that he would have the question thoroughly examined and brought to the attention of the ministry if I would write him a personal letter on the subject.

I then suggested to Mr. Libby to write to me, and I now have the honor to inclose a copy of my letter to Baron Pasetti, in which I forwarded a similar copy of Mr. Libby’s letter, inclosed.

The matter is now as much before this Government as if I had protested, and in a way much more likely to receive favorable consideration, as everything has been done in a personal and friendly way, with no antagonisms, such as a formal protest always produces.

* * * * * * *

I do not think for the present any further action is necessary beyond advising me of the views of our Government, until the compromise is reached between the Austrian and the Hungarian ministries. I ought then to be in a position to protest at once if a protest is to be made and is expected to accomplish anything before the compromise is ratified by the separate Parliaments.

I, however, believe that a compromise will be reached which will at least better our position even if it should not render it a perfectly equitable one.

* * * * * * *

I have, etc.,

James Fenner Lee.
[Inclosure 1 in No. 220.]

Mr. Libby to Mr. Lee.

Sir: Responding to your inquiries, I have the honor to define as follows the position of the American petroleum industry:

American petroleum has “been gradually excluded from the markets of Austria-Hungary. Were this traceable to inferiority of product, geographic position, or to any other natural incident of competitive commerce, it would have been a source of regret, but not a ground for complaint, or had this exclusion been due to the protection of a home industry or an increase of the internal revenue it would have been again an occasion of regret, but again no ground for complaint.

The American industry has, however, a grievance, and it is an emphatic one, viz, a product corning from another foreign country (it matters not by what technical or trade name the said product may be designated), but which is practically and actually [Page 18] a semi-refined petroleum, is admitted into Austria-Hungary upon the payment of about one-half the duty exacted from American crude, viz, 1.10 and 2 florins per 100 kilos, respectively.

In the full belief that this inequitable discrimination against the American product (and which has driven it from these markets, where it should naturally compete for public favor) is in conflict with the, spirit and intent and language of the treaty existing between Austria-Hungary and the United States, the petroleum industry of America have solicited the friendly interposition of the Department of State in submitting their grievance to the Government of Austria-Hungary in the hope that its justice may be recognized and the discrimination complained of may be removed.

I have, etc.,

Wm. H. Libby.
[Inclosure 2 in No. 220.]

Mr. Lee to Baron Pasetti.

Excellency: As suggested by you at an unofficial interview, I inclose in an entirely unofficial way a copy of a letter received by me from Mr. Libby concerning the effect which has been produced on our export trade in petroleum by the present rendering of existing laws.

Mr. Libby is in Europe in the interest of the American petroleum industry, and any statement of his with regard to that trade is entitled to attentive official consideration by me.

I venture to ask you in this unofficial way to look into the subject, because I believe that an investigation of the question at this particular time will develop so intimate a relation between the interests of this country and those of the American petroleum trade that any official action will become unnecessary on my part.

With assurances, etc.,

James Fenner Lee.