The Secretary of State to the Chargé in Argentina (Wadsworth)

No. 601

Sir: Reference is made to your confidential despatch No. 1333 of October 2, 1920,26 on the subject of the Bolivia-Argentine Exploration Company contracts, and in which you ask for further confidential information, for your guidance, on the general attitude of the Department concerning national or provincial petroleum monopolies and monopolistic pipe line concessions in foreign countries.

The Department does not take the position that it will make representations with respect to any monopoly of natural resources or transportation established or proposed in any foreign country. It is believed that government monopolies or monopolies granted by a government to its own nationals are, generally speaking, matters of domestic jurisdiction. Monopolistic concessions granted by a foreign government to nationals of another country other than the United States would probably in many cases be considered objectionable on grounds of discrimination. The Department desires its representatives in foreign countries to endeavor to prevent the adoption of discriminatory measures directed at or injuriously affecting American interests.

To this end it might be urged informally and discreetly whenever there is an appropriate opportunity that monopolistic measures tend to restrict freedom of commerce and increase the possibility of misunderstandings, friction, and entanglements, leading to possible movements for retaliation and consequent ill feeling. In the case of Argentina, a monopolistic concession relating to petroleum production would violate the principle of reciprocity and it might have injurious effects on trade between Argentina and the United States. If the Argentine Government, however, after giving careful consideration to the American point of view, decides to grant a monopolistic concession, you should impress upon the Argentine Government [Page 370] the feeling of this Government that citizens of the United States should have the same opportunity to participate in such a concession as the citizens of any other country.

Monopolistic concessions for petroleum production or transportation are viewed by the Department as of particular importance from the standpoint of the national interest and all proposals for such concessions should be studied and reported with special care and promptness.

The attitude of the Department as outlined to the representatives of the Bolivia-Argentine Exploration Company, concerning which you ask information, will be communicated to you as soon as the conference between the representatives of that company and the Department has taken place.

I am [etc.]

For the Secretary of State:
Norman H. Davis
  1. Not printed.