856d.6363/31
The Minister in the Netherlands (Phillips) to the Acting Secretary of
State
The
Hague, December 4,
1920.
[Received December 29.]
No. 385
Sir: Referring to the Department’s
Instruction No. 97, of November 11th last, and to previous
correspondence regarding the petroleum situation in the Netherlands
East Indies, I have the honor to transmit herewith the copy and
translation of a note dated December 2d from the Minister for
Foreign Affairs, which is in reply to my two notes to the Foreign
Office of September 7th and 25th last, copies of which I also
enclose herewith.15
It will be noted that the defence of the Netherlands Government in
granting exclusive privileges for the development of mineral oils to
a single company (namely, the Bataafsche) is because of “the lack of
interest on the part of American capital to obtain and exploit
petroleum concessions in the Indies” in the past.
The point is made that the object of the present legislation
regarding the development of oil is in order that the State should
profit as much as possible from the exploitation and it is for this
reason
[Page 289]
that the
legislation in question gives the Government the right of choice, in
regard to the petroleum fields not already exploited, between
exploitation by the State or exploitation by virtue of contract. The
Government holds that private companies may be considered as
contractors working in the service of the Government and obtaining a
certain remuneration therefor.
The Netherlands Government having adopted this policy in no uncertain
terms, I do not believe that it is advisable or profitable for the
Government of the United States to endeavor to obtain a modification
of the existing laws at the present time. I think it is advisable,
as I have previously informed the Department, to insist upon
American capital being permitted to participate through a private
arrangement with the Bataafsche Petroleum Maatschappij, in
accordance with the terms of the Explanatory Memorandum accompanying
the new Government Bill, a copy of which was transmitted in my
despatch No. 374, of November 24.16 The Memorandum explains, as the Department will
recollect, that
“account should be taken of the fact that
circumstances may arise making it desirable that the
transfer of a part of the B-Shares should pass to persons or
bodies of foreign nationality. Such transfer, however, will
not be able to take place except with the express permission
of the Minister of the Colonies”,
and also provides that foreigners may become members
of the Board of Directors of the new company organized by the
Government.
I have [etc.]
[Enclosure—Translation17]
The Netherland Minister for Foreign
Affairs (van
Karnebeek) to the
American Minister (Phillips)
The Hague, December 8, 1920.
Littera D.A.E.
No. 23397
Mr. Minister: In reply to the notes
which Your Excellency was good enough to address to me on
September 7th and 25th last, I have the honor to inform you that
since the measures, mentioned in the note attached to my letter
of June 30 (No. 12542), had been taken, no concession was given
to private persons or societies for the exploitation of
petroleum fields in the Netherlands Indies.
Before that date the possibility of obtaining such concessions
was open as well to foreign interests as to Netherlands
interests.
[Page 290]
If therefore the best concessions are controlled at present, as
is stated in the Memorandum annexed to Your Excellency’s letter
of September 7th, by a single Netherlands company, this state of
affairs cannot be attributed to the legislation or the
Government of the Dutch Indies, but to the lack of interest on
the part of American capital in obtaining and exploiting
petroleum concessions in the Indies.
Furthermore, there is no doubt that in the period during which
petroleum concessions were given to private persons or
societies, the Netherlands-Indian Government has in no manner,
in the application of this mining legislation, distinguished
between societies with foreign capital, for instance American,
and societies with Dutch capital. The note attached to my letter
of June 30 has already shown that as a consequence of the
proposed modification of the mining policy, the Dutch-Indian
Government has since 1913 ceased to accord any concessions for
the exploitation of petroleum fields and has given no permission
for the prospecting of petroleum.
Since then, the new mining law of July 20, 1918 (S. 466) has
established that the discovery of petroleum, coal and iodine,
does not give any right to the discoverer of these products to
obtain a concession for exploitation.
The exploitation of these minerals will be carried out by the
Government, or by contract—to be approved by a law—between the
Government and a corporation.
The object of the mining legislation in regard to the three
products mentioned is now that the State should profit as much
as possible from the exploitation. It is for this reason that
the legislation in question gives the Government the right of
choice, in regard to the petroleum fields not already exploited,
between exploitation by the State or exploitation by virtue of a
contract.
In this sense the private companies may be considered in a
certain measure as contractors (entrepreneurs
de travaux) working in the service of the Government
and obtaining a certain remuneration therefor.
Under the present régime no one can claim the right to exploit
the petroleum fields, but every society or company may,
independently of the question whether its stockholders are
Netherlanders or foreigners, solicit from the Government the
right to exploit for the State under a contract.
Your Excellency will note from the foregoing that before the
modification of the régime of 1913 no distinction was made
between foreign and Dutch capital for the exploitation of
petroleum concessions; that between 1913 and 1918 no concession
was granted, and that under the new régime of 1918 the
possibility existed as much
[Page 291]
for companies with foreign interests as
for those with Dutch interests to obtain a contract for
exploitation.
I beg Your Excellency to bring the above to the attention of His
Government and to assure it that there exists no tendency in the
East Indies to set aside the foreign capital and spirit of
enterprise in these Colonies.
Indeed, numerous agricultural and mining exploitations exist in
the Indies in which American capital and American citizens
occupy important and honorable positions, and this to the great
satisfaction of the Government of the Queen.
Accept [etc.]
For the Minister:
A. M.
Snouck Hurgronje
The
Secretary General