File No. 763.72112/141
The Standard Oil Company of New Jersey (by William H. Libby ) to the Secretary of State
Sir: In continuation of my letter of September 18, I have the honor on behalf of the Standard Oil Company (New Jersey) to acknowledge receipt of your courteous reply thereto, dated September 22, and from which I quote the final phrase:
If you desire the Department to do so, it will submit through diplomatic officers a request for a more specific declaration by the belligerent powers.
May we not respectfully and seriously urge upon the Department to substitute for such request a notification to the belligerent powers that the United States Government does not feel justified in conceding the illuminating oil of commerce as fairly liable to contraband classification?
It was not my intention to suggest that requests should be submitted by our Government to the governments of the countries at war for “a more specific declaration” on the subject. Such requests could, I fear, have but one result, as they would imply that it was left to those governments exclusively to say what was, and what was not, contraband. The course of events in the present war leaves little or no room for doubt that the belligerents, particularly those controlling the sea, would avail themselves of the opportunity thus afforded, to bring within the scope of belligerent inhibition still another branch of neutral trade upon the supposition that the cutting [Page 296] off of commerce, even in innocent articles having no distinctive military use, would tend to put pressure upon the enemy—a supposition which, if it were allowed to prevail, would potentially result in the entire destruction of the trade of neutrals with the belligerent powers, and even serving to seriously embarrass the commerce between neutrals.
The following is an extract of a reply from the Department of State, under date of March 7, 1904, to an inquiry made by this company, under date of March 2, 1904, concerning the status of illuminating oil:
Under the ordinary rules of international law and taking the Russian announcement in its literal sense, the oils which are declared contraband are those which are “obviously fuel” and are commercially sold as such. This is inferred to be the Russian view, inasmuch as the use of mineral oils for fuel is large in Russia and the commercial distinction between such oils and those used as illuminants and lubricants is well known.
The Department does not apprehend Russian interference with innocent traffic in oils obviously different from those declared contraband and in their nature unsuited for belligerent use. It is not thought advisable to raise a question in this regard in advance of a case actually arising. Should a tangible issue be presented, this Department will do everything possible to safeguard the interests of innocent commerce on the part of American citizens.
Subsequently, the expectations that had been entertained as to what would be the course of the Russian Government were disappointed. More than a year later, that is to say, on May 18, 1905, the British steamer Oldhamia, with a cargo of illuminating oil valued at more than $120,000 and belonging to this company, was seized by a Russian cruiser, and within a week, after having been placed in charge of a prize crew, was wrecked on Ourop Island and set on fire and abandoned. Claims were duly filed by the owners in the Russian prize courts for the value of the ship and cargo. The court of first instance held that the cargo was not contraband; but after this decision was rendered, the same court, its personnel having been changed, was hastily reconvened, and, as thus reconstituted, it rendered a sentence of confiscation, which was affirmed on appeal.
Against this sentence the British Government, as well as the Government of the United States, protested, the former government, in a memorandum of January 23, 1911, saying:
Par. 6. That, even assuming that such consignment could bear any contraband character (which His Majesty’s Government were not prepared to admit), it would be necessary to prove that it was destined for the use of the enemy’s forces, and not a shadow of evidence to that effect was produced.
It is a notorious fact that, during the Russo-Japanese war, the Russian Government, without resorting to the recognized measure of blockade, sought to cut off the entire trade of neutrals with Japan by means of an extension of the list of contraband, in which it sought to include in the most absolute terms both provisions and raw cotton, thus striking a direct blow at the export trade of this country.
The creation of a similar condition of things is now threatened. (See my letter of this date re detention of Ocean and Chester.) Thus, not only in the present existing case is illuminating oil apparently asserted to be contraband, but the effect of the neutral destination is altogether ignored.
As was pointed out in my letter of the 18th of September, the annual exportation of illuminating oil from this country amounts to [Page 297] 1,100,000,000 gallons. This extensive and legitimate commerce is now gravely menaced by a claim which involves nothing less than a pretention to supervise, to regulate, to subject to conditions and even to prohibit sea-borne commerce, not only between neutrals and belligerents; but also between neutrals themselves, without regard to the limitations imposed upon belligerent action by the law of contraband and blockade.
In view, therefore, of the position taken both by the American and the British Governments in the aforesaid case of the Oldhamia, would not the Department be consistent in maintaining the non-contraband classification of illuminating oil, and would not the British Government be correspondingly inconsistent in contesting this?
No American industry was more instantaneously and acutely affected by the war than the petroleum industry, and should the Department be unable to secure non-contraband classification for illuminating oil, the entire export commerce in petroleum products would be menaced, inasmuch as fuel oil and lubricants are already under the ban of declared conditional contraband.
I have [etc.]