800.6363/143

The Ambassador in Great Britain (Davis) to the Secretary of State

No. 3061

Sir: I have the honor to refer to the Department’s telegram No. 633 of June 15, 3 p.m.,63 in the matter of the Mesopotamian oil situation, and to state that in accordance with instruction contained therein I have today communicated with the Foreign Office, withdrawing my original Note No. 317 of May 12, 1920,64 and substituting, under identic date and number, an amended Note as per copy enclosed herewith.

I have [etc.]

John W. Davis
[Enclosure]

The American Ambassador (Davis) to the British Secretary of State for Foreign Affairs (Curzon)

No. 317

My Lord: Pursuant to the instructions of my Government, I have the honour to inform Your Lordship that the Government of the [Page 652]United States has been officially [unofficially]65 informed that the Mandates for Mesopotamia and Palestine have been assigned to Great Britain; the Mandate for Mesopotamia being given subject to friendly arrangement with the Italian Government regarding economic rights.

The Government of the United States desires to point out that during the Peace negotiations at Paris leading up to the Treaty of Versailles, it consistently took the position that the future Peace of the world required that as a general principle any Alien territory which should be acquired pursuant to the Treaties of Peace with the Central Powers must be held and governed in such a way as to assure equal treatment in law and in fact to the commerce of all nations. It was on account of and subject to this understanding that the United States felt itself able and willing to agree that the acquisition of certain enemy territory by the victorious powers would be consistent with the best interests of the world. The representatives of the principal Allied Powers in the discussion of the Mandate principles expressed in no indefinite manner their recognition of the justice and far-sightedness of such a principle and agreed to its application to the Mandates over Turkish territory.

The Administration of Palestine and Mesopotamia during the interim period of military occupation has given rise to several communications between the United States Government and that of Great Britain relative to matters that had created the unfortunate impression in the minds of the American public that the Authorities of His Majesty’s Government in the occupied region had given advantage to British oil interests which were not accorded to American Companies and further that Great Britain had been preparing quietly for exclusive control of the oil resources in this region. The impression referred to has, it is believed, been due in large part to reports of authoritative statements regarding the general Oil Policy of Great Britain and of actual work such as the construction of pipe lines, railways and refineries, the operations of certain oil wells, the acquisitions of dockyards, cotton investigations and permitted researches by certain individuals whose activities, though stated to be solely in behalf of the civil Administration, were attended by circumstances which created the impression that some benefit at least would accrue to British oil interests.

Certain of the occurrences above referred to have been explained by his Majesty’s Government as due to military necessity, and certain others as due to laxity on the part of local authorities. It must be realized, however, that it has been difficult for the American people [Page 653]to reconcile all of these reports with the assurance of His Majesty’s Government that “the provisional character of the military occupation does not warrant the taking of decisions by the occupying power in matters concerning the future economic development of the country”, and that the invitation [initiation] of new undertakings and the exercise of rights under concessions would be prohibited. The United States Government has confidence in the good faith of His Majesty’s Government in attempting to carry out the assurances given by His Majesty’s Foreign Office, but desires to point out that the considerations above referred to indicate the difficulty in insuring the local execution of such undertakings and the necessity for careful measures to guarantee the practical fulfillment of the principles expressed and agreed to during the peace negotiations at Paris.

With this thought in mind, the Government of the United States ventures to suggest the following propositions, which embody or I illustrate the principles which the United States Government would be pleased to see applied in the occupied or mandated regions and which are submitted as furnishing a reasonable basis for discussions. In the event of such discussions it would be assumed that the legal situation as regards economic resources in the occupied or mandated regions would remain in statu quo pending an agreement:

(1)
That the Mandatory Power strictly adhere and conform to the principles expressed and agreed to during the peace negotiations at Paris and to the principles embodied in Mandate “A” prepared in London for adoption by the League of Nations by the Commission on Mandatories.
(2)
That there be guaranteed to the nationals or subjects of all nations treatment equal in law and in fact to that accorded nationals or subjects of the Mandatory Power with respect to taxation or other matters affecting residence, business, profession, concessions, freedom of transit for persons and goods, freedom of communication, trade, navigation, commerce, industrial property, and other economic rights or commercial activities.
(3)
That no exclusive economic concessions covering the whole of any Mandated region or sufficiently large to be virtually exclusive shall be granted and that no monopolistic concessions relating to any commodity or to any economic privilege subsidiary and essential to the production, development, or exploitation of such commodity shall be granted.
(4)
That reasonable provision shall be made for publicity of applications for concessions and of Governmental Acts or Regulations relating to the economic resources of the Mandated territories; and that in general regulations or legislation regarding the granting of concessions relating to exploring or exploiting economic resources [Page 654]or regarding other privileges in connection with these shall not have the effect of placing American citizens or companies or those of other nations or companies controlled by American citizens or nationals of other countries at a disadvantage compared with the nationals or companies of the Mandate nation or companies controlled by nationals of the Mandate nation or others.

The fact that certain concessions were granted in the mandated regions by the Turkish Government is, of course, an important factor which must be given practical consideration. The United States Government believes that it is entitled to participate in any discussions relating to the status of such concessions not only because of existing vested rights of American citizens, but also because the equitable treatment of such concessions is essential to the initiation and application of the general principles in which the United States Government is interested.

No direct mention has been made herein of the question of establishment of monopolies directly or indirectly by or in behalf of the Mandatory Government. It is believed, however, that the establishment of monopolies by or in behalf of the Mandatory Government would not be consistent with the principles of trusteeship inherent in the Mandatory idea. His Majesty’s Government has stated its conception of the necessity for the control of oil production in these territories in time of national emergency. The Government of the United States does not intend at present to suggest arrangements that shall extend to any consideration not included in an enlightened interpretation of what constitutes its legitimate commercial interests. The question of control in times of national emergencies of supplies which may be deemed essential by Great Britain is a subject which the United States Government deems a matter for separate discussion.

The Government of the United States realizes the heavy financial obligations which will arise in connection with the administration of the Mandatory. It believes, however, that any attempt toward reimbursement by the adoption of a policy of monopolization or of exclusive concessions and special favours to its own nationals, besides being a repudiation of the principles already agreed to would prove to be unwise even from the point of view of expediency both on economic and political grounds. It also believes that the interests of the world as well as that of the two respective countries can best be served by a friendly co-operation or a friendly and equal competition between the citizens of the two countries and citizens of other nationalities.

The Government of the United States would be glad to receive an early expression of the views of His Majesty’s Government, especially in order to reassure public opinion in the United States.

[Page 655]

I have the honour further to acquaint Your Lordship that this Note is not designed by way of reply to the Allied Note from San Remo,66 which will be answered separately.

I have [etc.]

John W. Davis
  1. Not printed.
  2. Presented to the Foreign Office, in obedience to instructions of May 10, which are not printed.
  3. The correction was authorized by a telegram from the Department, dated July 12, 1920, 4 p.m. (file no. 800.6363/148a).
  4. Presumably the note transmitted to the Department in telegram no. 10, Apr. 27, from the Ambassador in Italy, p. 779.