856d.6363/21
The Secretary of State to the Minister in the Netherlands ( Phillips )
Sir: Reference is made to previous correspondence regarding the petroleum situation in the Netherlands East Indies and especially [Page 287] to your despatches No. 313 of October 7, 1920, and No. 325 of October 20, 1920,10 embodying conversations which you have had with the Minister of Colonies, and with Mr. J. T. Cremer, the Netherlands Minister at Washington. There is transmitted herewith a copy of a note to the Netherlands Legation at Washington dated November 2, 1920,11 in reply to the Legation’s note dated September 27, 1920,12 a copy of which with an accompanying memorandum was transmitted to you with the Department’s instruction No. 95 of October 21, 1920.13
The statements in the Department’s note to the Netherlands Legation relating to the application of the general leasing law to Netherlands citizens were based on communications from the Department of the Interior. This Department desires that the Netherlands Government should clearly understand the position taken by the Department of the Interior in the administration of the general leasing law. The Netherlands Legation at Washington apparently has not fully understood the requirements of the reciprocity provision of the law with respect to the operation of Netherlands laws on American citizens or American companies in the Netherlands East Indies.
With reference to the statement of Mr. Hugo Loudon, of the Royal Dutch Petroleum Company, that before admitting American interests to participation in the Bataafsche Company he would wish specific information whether such cooperation would be satisfactory to the United States and would remove the present restrictions against Netherlands citizens in the United States, you were probably correct in assuring Mr. Loudon that you could obtain promptly from this Department any desired information on this point. While this Department cannot speak definitely regarding the administration of the general leasing law, it would not appear that the operation of the law could be relaxed in the light of a purely private arrangement, with no change in the laws or policy of the Netherlands Government. Nevertheless, the Department does not wish this aspect of the situation to be put forward in such a way as to discourage private negotiations.
I am [etc.]