763.72119/6986: Telegram
The Secretary of State to the Commission to Negotiate Peace
3286. Your 4409, September 28, 7 p.m. …
Department does not regard decision as satisfactory for the following reasons:
1. Department understands that the tankers in question were exempt from Brussels Agreement, and exemption confirmed by Supreme Council after Scapa Flow sinking for reason, first, that the need of Germany to use these ships to import oil was recognized and, secondly, the equitable ownership of these boats by an American Corporation was deemed to be a reason for not requiring action by Germany which would in substance be at the expense of American interests. Department perceives no reason as to why the considerations which prevailed on this previous occasion should now be abandoned.
The second point of decision of Supreme Council requiring delivery of vessels for temporary management of allied and associated governments cannot it seems to the Department but prejudice the final disposition of these boats (and others which might as to beneficial ownership be similarly situated) since the only known basis of allocation (outside of repatriation needs which is not here applicable) is that ships should be allocated in accordance with ton for ton replacement principle adopted by the Treaty. In any case it is believed that once these vessels come into the control of British and French and are manned by their crews it will render it exceedingly difficult to have these boats restored to the Standard Oil as had been hoped in accordance with Paragraph 20 of Annex 2 and the private shipping agreement signed by the President and Mr. Lloyd-George a copy of which agreement is in volume of reparation papers.47
[Page 549]With reference to the third point of the decision it is noted that the ships shall be employed for one voyage for conveyance of oil to Germany. It is not provided that the voyage shall be from the United States to Germany. In view of the fact that this whole question appears to be involved in the rivalry of the Standard Oil and Royal Dutch Shell Companies, it is believed important that these Standard Oil vessels should not be disposed of in such a way that they will be put at the disposal of the Standard Oil’s chief foreign competitor in order that that competitor may obtain Standard Oil market in Germany.
On account of the importance of the matter at issue and the danger of establishing an unfortunate precedent, the Department desires that the matter be reconsidered by the Supreme Council with a view either that the exemption of tankers be maintained and tankers allowed to proceed to sea on such business as their owners may decide or that they all be provisionally allocated to the United States. Either action to be entirely without prejudice to the ultimate solution arrived at with reference to these vessels pursuant to treaty of Versailles and Wilson and Lloyd George Shipping Agreement.