856d.6363/6: Telegram
The Secretary of State to the Minister in the Netherlands (Phillips)
Washington, July 17, 1920—6
p.m.
493. Your telegram 157, July 7.
Your request is understood to refer, first, to action under the Public Lands Leasing Actor, second, to the general policy of the United States Government toward foreign oil restrictions.
- 1st.
- In a note of June 30, 1920, Netherlands Legation informed the Department that Dutch law provides that oil development shall henceforth be by the Government or by contract with Dutch subjects or residents of the Netherlands or Netherlands India or with companies incorporated in the Netherlands or Netherlands India. So far as the law is concerned, American citizens apparently have the same facilities as Dutch to obtain the contracts provided they incorporate as a Netherlands or Netherlands India company. The Public Lands Leasing Act restricts leases to American citizens and companies incorporated in the United States. Dutch law goes further, however, and provides that the majority of the managing board must be Dutch. There are some other restrictive provisions. Such restrictions are not applied by American law to foreigners and they undoubtedly operate to the exclusion of American capital from the Dutch East Indies. It is the view of the Department that the Netherlands has not accorded the same degree of freedom to American citizens that has been accorded to Netherlands nationals in the United States and that the Netherlands, therefore, has not granted reciprocal privileges. The administration of the Public Lands Leasing Act is in the Department of the Interior and it is impossible to say at present whether Dutch citizens will be excluded from leases in the United States. When this is known you will be informed.
- 2d.
- The Department is not prepared to say that the Netherlands policy would justify the enactment by Congress of retaliatory legislation or that retaliation is contemplated by this Government. It may be intimated to the Netherlands Government, however, that a strong public sentiment leaning toward retaliation exists in this country.
Copy of note from Netherlands Legation is going forward by mail.
Colby