800.6363/196 A

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

No. 1040

Sir: Referring to my telegram No. 1169 [1168] of November 2080 and to your telegraphic reply No. 1639, November 22, 4:35 P.M.,80 I transmit herewith the signed communication to Lord Curzon [Page 669]on the subject of petroleum resources in the Near East. I request that you will hand this note to His Lordship at your early convenience.

I am [etc.]

Bainbridge Colby
[Enclosure]

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

My Lord: I have the honor to refer to your note of August 981 regarding the application of the principle of equality of treatment to the territories of the Near East to be placed under mandates, and specifically to the petroleum resources of those territories as affected by that principle.

Before considering the observations of His Majesty’s Government on the general principles advocated by the United States, and agreed to by the Allied Powers, for application to the mandates^ over former Turkish territory, as outlined in the notes of May 12,82 and July 28,83 addressed to you on behalf of this Government, I think it will clarify the discussion to indicate certain of your statements and assurances which this Government has been pleased to receive. Thus, I note that the assignment to Great Britain of the mandate for Mesopotamia was made and accepted subject to no friendly arrangement whatever with any third Government regarding economic rights, which, of course, would have been wholly at variance with the purpose and contemplation of any mandate.

It is also gratifying to learn that His Majesty’s Government is in full sympathy with the several propositions formulated in the note of May 12, above referred to, which embody or illustrate the principles which this Government believes should be applied in the mandated regions, and which are essential to the practical realization of equality of treatment.

The statements of your note, to the effect that the British Government has refrained from exploiting the petroleum resources of the mandated territories in question; that the operations referred to have been conducted for purely military purposes under the immediate supervision of the army authorities and at army expense; and that no private interests whatever are in any way involved, are accepted with a full sense of the good faith of the British Government.

[Page 670]

The Government of the United States notes that His Majesty’s Government has found it necessary to suspend, during the period of occupation, the grant of facilities and opportunities to British as well as to other private interests to investigate the natural resources of the country, either for the purpose of acquiring new claims or strengthening old ones, and that there is no reason for assuming that the administration either of Mesopotamia or of Palestine has at any time failed to carry out the assurances of His Majesty’s Government.

This Government welcomes your pledges to the effect that the natural resources of Mesopotamia are to be secured to the people of Mesopotamia and to the future Arab State, to be established in that region, and that it is the purpose of the British Government, fully alive to its obligation as a temporary occupant, not only to secure those resources to the Mesopotamian State, but also its absolute freedom of action in the control thereof, and in particular that it is far from the intention of the mandatory power to establish any kind of monopoly or preferred position in its own interest.

The Government of the United States appreciates, likewise, the concurrence with its view that the merits of all claims to rights alleged to have been acquired in the mandated territories before the outbreak of hostilities must be duly established before recognition of such claims will be accorded.

Adverting, at this point, to the views of His Majesty’s Government regarding the nature of the responsibilities of mandatory powers under the League of Nations, I desire to call to the attention of His Majesty’s Government, the fact that, while the draft mandate, Form A, was not adopted at Paris, it was the understanding of the American representatives, there present, that the British Government entertained and had expressed convictions favorable to said form, and that, presumably, its representatives would exercise their influence in conformity with those convictions.

I need hardly refer again to the fact that the Government of the United States has consistently urged that it is of the utmost importance to the future peace of the world that alien territory transferred as a result of the war with the Central Powers should be held and administered in such a way as to assure equal treatment to the commerce and to the citizens of all nations. Indeed it was in reliance upon an understanding to this effect, and expressly in contemplation thereof, that the United States was persuaded that the acquisition under mandate of certain enemy territory by the victorious powers would be consistent with the best interests of the world.

It is assumed, accordingly, that your statements with reference to Mandate A, together with the statement that the draft mandates for [Page 671]Mesopotamia and Palestine have been prepared with a view to secure equality of treatment for the commerce and citizens of all states which are members of the League of Nations, do not indicate a supposition on your part that the United States can be excluded from the benefits of the principle of equality of treatment.

This Government is pleased to find that His Majesty’s Government is in full sympathy with the principles formulated in its communications of May 12, and July 28. But it is unable to concur in the view, contained in paragraph 15 of your note, that the terms of the mandates can properly be discussed only in the Council of the League of Nations and by the signatories of the Covenant. Such powers as the Allied and Associated nations may enjoy or wield, in the determination of the governmental status of the mandated areas, accrued to them as a direct result of the war against the Central Powers. The United States, as a participant in that con flict and as a contributor to its successful issue, cannot consider any of the associated powers, the smallest not less than itself, debarred from the discussion of any of its consequences, or from participation in the rights and privileges secured under the mandates provided for in the treaties of peace.

This Government notes with interest your statement that the draft mandates for Mesopotamia and for Palestine, which have been prepared, with a view to secure equality of treatment and opportunity for the commerce, citizens and subjects of all states, which are members of the League of Nations will, when approved by the interested Allied Powers, be communicated to the Council of the League of Nations. The United States is, undoubtedly, one of the powers directly interested in the terms of the mandates, and I therefore request that the draft mandate forms be communicated to this Government for its consideration before their submission to the Council of the League. It is believed that His Majesty’s Government will be the more ready to acquiesce in this request, in view of your assurance that His Majesty’s Government is in full sympathy with the various principles contained in the two previous notes of this Government upon this subject.

The establishment of the mandate principle, a new principle in international relations, and one in which the public opinion of the world is taking a special interest, would seem to require the frankest discussion from all pertinent points of view. It would seem essential that suitable publicity should be given to the drafts of mandates which it is the intention to submit to the Council, in order that the fullest opportunity may be afforded to consider their terms in relation to the obligations assumed by the mandatory power, and the respective [Page 672]interests of all governments, which are or deem themselves concerned or affected.

The fact cannot be ignored that the reported resources of Mesopotamia have interested public opinion of the United States, Great Britain, and other countries as a potential subject of economic strife. Because of that fact they become an outstanding illustration of the kind of economic question with reference to which, the mandate principle was especially designed, and indeed a peculiarly critical test of the good faith of the nations, which have given their adherence to the principle. This principle was accepted in the hope of obviating in the future those international differences that grow out of a desire for the exclusive control of the resources and markets of annexed territories. To cite a single example: Because of the shortage of petroleum, its constantly increasing commercial importance, and the continuing necessity of replenishing the world’s supply by drawing upon the latent resources of undeveloped regions, it is of the highest importance to apply to the petroleum industry the most enlightened principles recognized by nations as appropriate for the peaceful ordering of their economic relations.

This Government finds difficulty in reconciling the special arrangement referred to in paragraphs 18 and 19 of your note, and set forth in the so-called San Remo Petroleum Agreement, with your statement that the petroleum resources of Mesopotamia, and freedom of action in regard thereto, will be secured to the future Arab State, as yet unorganized. Furthermore, it is difficult to harmonize that special arrangement with your statement that concessionary claims relating to those resources still remain in their pre-war position, and have yet to receive, with the establishment of the Arab State, the equitable consideration promised by His Majesty’s Government.

This Government has noted in this connection a public statement of His Majesty’s Minister in Chargé of Petroleum Affairs to the effect that the San Remo Agreement was based on the principle that the concessions granted by the former Turkish Government must be honored. It would be reluctant to assume that His Majesty’s Government has already undertaken to pass judgment upon the validity of concessionary claims in the regions concerned, and to concede validity to certain of those claims which cover, apparently, the entire Mesopotamian area. Indeed this Government understands your note to deny having taken, and to deny the intention to take, any such ex parte and premature action. In this connection, I might observe that such information as this Government has received indicates that, prior to the war, the Turkish Petroleum Company, to make specific reference, possessed in Mesopotamia no rights to petroleum concessions or to the exploitation of oil; and in view of your assurance that it is not the intention of the mandatory power to establish on its own [Page 673]behalf any kind of monopoly, I am at some loss to understand how to construe the provision of the San Remo Agreement that any private petroleum company which may develop the Mesopotamian oil fields “shall be under permanent British control”.

Your Lordship contrasts the present production of petroleum in the United States with that of Great Britain and some allusion is made to American supremacy in the petroleum industry. I should regret any assumption by His Majesty’s Government or any other friendly power, that the views of this Government as to the true character of a mandate are dictated in any degree by considerations of the domestic need or production of petroleum, or any other commodity.

I may be permitted to say, however, for the purpose of correcting a misapprehension which your note reflects, that the United States possesses only one-twelfth approximately of the petroleum resources of the world. The oil resources of no other nation have been so largely drawn upon for foreign needs, and Your Lordship’s statement that any prophecies as to the oil-bearing resources of unexplored and undeveloped countries must be accepted with reserve, hardly disposed of the scientific calculation upon which, despite their problematical elements, the policies of States and the anticipations of world-production are apparently proceeding. The Government of the United States assumes that there is a general recognition of the fact that the requirements for petroleum are in excess of production and it believes that opportunity to explore and develop the petroleum resources of the world wherever found should without discrimination be freely extended, as only by the unhampered development of such resources can the needs of the world be met.

But it is not these aspects of oil production and supply, in so far as they are of domestic interest to the United States, with which I am concerned in this discussion. I have alluded to them in order to correct confusing inferences, liable to arise from certain departures, which I believe I discern in Your Lordship’s communication, from the underlying principles of a mandate, as evolved and sought to be applied by the Allied and Associated Powers to the territories, brought under their temporary dominion, by their joint struggle and common victory. This dominion will be wholly misconceived, not to say abused, if there is even the slightest deviation from the spirit and the exclusive purpose of a trusteeship as strict as it is comprehensive.

Accept [etc.]

Bainbridge Colby
  1. Not printed.
  2. Not printed.
  3. See telegram no. 1205, Aug. 11, 1920, from the Ambassador in Great Britain, p. 663.
  4. Ante, p, 651.
  5. See telegram no. 785, July 26, 1920, to the Ambassador in Great Britain, p. 658.