856d.6363/13: Telegram
The Minister in the Netherlands ( Phillips ) to the Secretary of State
[Received September 16—7:55 p.m.]
254. At the request of the representative of the American Oil Corporation referred to in my 237 August 27, 6 p.m., I presented him to the Minister of the Colonies and on behalf of his company he made application for a portion of the Djambi concessions. The Minister advised him that it was now intended to lay before the Chamber a proposal by which the development of the Djambi fields would be entrusted to the Bataafsche Petroleum Maatschappij under an arrangement which would provide that [for?] Government control through Government representation in the management of the profits (he intimated that the larger part to go to the Government). The proposal to this effect would be put before the chairmen when the Indian budget is presented end of October or November. The Minister expects opposition but seems to think it will be carried. Furthermore, the Minister made the following careful statement “that in the arrangement which the Government contemplated making with the Bataafsche Petroleum Company and which would provide for a management in which the Government would have a seat, such clause would be inserted as would make it possible for the Government to allow foreign interests to participate at any future time when and if this should be considered necessary or advisable to”. In reply to the question whether the inference from the above is that at present nothing could be done in the way of allowing American interests to participate, the Minister replied in the affirmative.
I called at the Foreign Office this afternoon and acquainted the Acting Minister for Foreign Affairs with the attitude of the Minister of the Colonies and said that in spite of the assurances M. van Karnebeek had given me that American capital was desired it was now apparently the policy not to allow American participation. The Acting Minister pleaded that the contract with the Bataafsche Company had been concluded a year ago before the American Government had expressed any definite interest in the matter. I emphasized [Page 278] very strongly the disappointment that would arise in America when it was learned that American capital was to be excluded and I said that I had hoped to be placed in a position which would prevent the anticipated retaliatory measures against Dutch oil interests in America and that open market [sic] personally was very much disappointed at the course of events.
It is undoubtedly true that the rights of development under Government control of the Djambi fields and very possibly all mineral concessions in the East Indies have been promised to the Bataafsche Petroleum Maatschappij and I am convinced that I can do nothing further here unless I am in a position to state that retaliatory measures will be employed against the Dutch oil interests in America unless American capital is permitted to participate in the Netherlands Indies.