362.115 St 21/55: Telegram
The Secretary of State to the Ambassador in France (Sharp)
9028. Department is informed by Standard Oil Company of New Jersey that nine tank steamers now lying in German ports which [Page 543] are registered in the name of the Deutsch-Amerikanische Petroleum Gesellschaft, a German subsidiary of the Standard Oil Company, will be immediately used by the Standard Oil Company in transporting oil from United States to Germany. To this there appears to be no valid objection, but in order that you may be prepared to meet any questions which may be raised the following situation with regard to tankers is given you.
Total capitalization of German subsidiary company is 60,000,000 marks consisting of 9,000,000 marks of shares, 21,000,000 marks of share warrants and 30,000,000 marks of debentures practically all owned by Standard Oil. In February 1917 Standard sold shares which carry voting power and control to certain German subjects who had been identified with German company’s management, lest ships and other property of company might if war ensued be seized and sold by Germany as American owned and controlled property. Purchaser pledged for payment American securities then in United States of far less value. United States Alien Property Custodian seized pledged securities holding sale was invalid, that no debt existed and shares still belong to American company which it is stated in any event continued to own 85 per cent interest. Ships and other property in German jurisdiction were not appropriated by Germany.
The tankers in question have not been allocated to any of the Allied or Associated Powers, being expressly exempted by the Brussels Agreement of March 14, 1919.48 The Peace Treaty has been ratified by Germany and the blockade raised and trade relations between United States and Germany resumed. It therefore seems unobjectionable that these tankers though under German flag should go to sea with their own crews and engage in commerce.
Under Treaty of Peace Germany is to deliver certain categories of ships to Reparation Commission. Reserving any other questions the delivery is in no event required to be made until two months after Treaty comes into force and this delivery is not delivery of hulls assembled in one place but is delivery of documents of title. The American interest in the German company has heretofore been diplomatically protected by this Government and was expressly recognized by Great Britain and France in 1914 and 1915 in acquiescing in transfer of a number of tankers registered in the name of the German company to the Standard Company and the American flag.49 The principle of equitable ownership thus applied greatly enured to advantage of Allied Powers in preserving supremacy at sea in preventing formation in neutral countries of companies with German capital to send ships to sea in German interests under neutral flags. Same principle is recognized in Peace Treaty in [Page 544] reparation clauses Annex II paragraph 20 which provides that Reparations Commission shall have due regard for any legal or equitable interests of nationals of Allied or Associated or neutral Powers in connection with shipping.
Where “property, rights and interests” of nationals of Allied or Associated Powers have been subjected to exceptional war measures and measures of transfer in Germany Article 297(A) of Treaty provides that when liquidation has not been completed such measures shall be immediately dropped and property, rights and interests restored to their owners who shall enjoy full rights therein in accordance with Article 298 which stipulates for enjoyment in same measure as before the war. Evidently where property, rights and interests have not been subjected to such measures the Treaty does not take from the owners what Germany has not attempted to seize. Article 297(F) recognizes principle of restoration of property in specie wherever possible.
Standard Oil Company of New Jersey in meeting Allied war needs lost during the war by enemy action 10 ships under American flag aggregating 76,674 tons deadweight. Nine of these were tankers aggregating 69,144 tons which exceeds by 16,000 tons the aggregate tonnage of tankers now at Hamburg.
In March last Standard Oil, on hearing a rumor that the French Government intended to claim the tankers as part of its individual indemnity, filed with this Department a written protest against supposition that property rights of an ally and friend, which had escaped enemy appropriation, might be appropriated for the benefit of another ally and friend. The matter was supposed to be have been dropped, but in a debate in French Chamber of Deputies on July 2d, the Minister of Public Works declared the Government intended to make every effort to get the tankers, and reference was also made to the proposed State Monopoly in France of the purchase and importation of Refined Oil and Gasoline, and of the importance to the Government of constituting a petroleum fleet.
Please give copy to Under Secretary Polk for his information. Identical instructions cabled to London.
- Not printed.↩
- See Foreign Relations, 1914, supp., pp. 485 ff, and 1915, supp., pp. 674 ff.↩