856d.6363/13: Telegram
The Secretary of State to the Minister in the Netherlands (Phillips)
573. Your 254, September 15.
The Department has received a letter dated September 20, 1920, from the Secretary of the Interior who administers the general leasing law, reading in part as follows:
“While on their face the laws of the Netherlands seem not to deny the right of an American citizen to own or hold stock in Netherlands corporations engaged in exploring or producing oil, it would seem that as administered the restrictions are such as to practically exclude Americans from such participation.
“The decisions of this Department with respect to the acquisition of mineral lands under the general mining laws of the United States have been that while the law permits the acquisition of such public lands only by citizens or corporations of the United States, corporations organized under the laws of the United States or one of its States or Territories may acquire such mining title, notwithstanding even a major portion of the stock of a corporation is owned or held by aliens, and in the administration of the mining laws no discrimination has been practiced against such corporations, they being accorded equal privileges with those, the stock of which is owned wholly by American citizens. The provisions of the new leasing law, however, as you will note, put the matter upon a reciprocal basis, and unless the Netherlands and other foreign Governments are willing to accord in their laws and in the administration thereof equal and like privileges to corporations organized under the laws of the Netherlands or its colonial possessions, the stock of which is owned or held in part by American citizens, as they accord to corporations the stock of which is wholly owned by Netherland citizens, it [Page 279] would seem to be the duty of those administering our oil-leasing law to deny its privileges to those corporations organized under the laws of the United States whose stock in substantial or controlling amounts, is held by citizens of non-reciprocating countries.
“I suggest to you the advisability of taking up with the Netherlands Legation and with the legations of other foreign countries, as occasion arises, this matter of reciprocity, expressing the opinion that the reciprocity must be not only in the letter of the law but in its administration and operation.”
A letter from the same official to the Commissioner of the General Land Office of the same date reads as follows:
“Pending action by the Netherlands Government or the receipt of information which would warrant a different course, you are advised that the Department will not issue permits or leases under the act of February 25, 1920, to corporations organized under the laws of the United States where the controlling or major portion of the stock of the corporation is owned, held, or controlled by citizens of the Netherlands or other nonreciprocating countries.”
You may inform the Netherlands Foreign Office of the contents of these letters, and express the earnest hope that the Netherlands Government will take action leading to real reciprocity in the relations of the two countries with respect to petroleum production.