811.6363/28: Telegram

The Acting Secretary of State to the Minister in the Netherlands (Phillips)

613. Your 287, December 20. The following is for your information to be conveyed orally to the Minister of the Colonies at your discretion.

Act No. 2932 of the Philippine Legislature, approved by the President August 31, 1920, in effect in Philippines September 2, 1920, opens petroleum lands to “exploration, location, and lease by citizens of the Philippine Islands or of the United States and by associations and corporations wholly composed of citizens of the Philippine Islands or of the United States or both”. Rules and Regulations dated October 13, 1920, prescribed by the Philippines Council of State under this law provide “Any citizen of lawful age of the Philippine Islands or of the United States, and any corporation, [Page 548] association or partnership composed wholly of citizens of the Philippine Islands or of the United States, or both, may lease any tract of petroleum land under the provisions of Act No. 2932,” by filing proper application. Aliens thus appear to be excluded both from direct leasing and from holding stock in leasing companies. The provision regarding citizenship is not reciprocal like the United States General Leasing Law.42

The Act was not brought to the attention of the Department when it was under consideration. It was passed by the Philippine Legislature under its general powers of legislation in order to open the oil resources of the Philippines at the earliest possible moment to exploration and development. The Department understands, although it is without precise information on this point, that the restrictive feature was not recommended by this Government or by the Governor General. The presence of oil in the Philippines is problematic and it is understood that no leases have yet been granted.

The Governor General in his latest message to the Philippine Legislature recommended amendment of the law so as to permit the holding by aliens of stock in leasing companies. The Bureau of Insular Affairs of the War Department has also telegraphed the Governor General that the Department of State is anxious “that the Philippine Petroleum Act should be modified to conform in respect of foreign citizens to United States Act of February 25, 1920, last clause of section one. This is a slight modification of the recommendation in your message and seems to accomplish same purpose.” The clause referred to is the reciprocity provision. The Chief of the Bureau of Insular Affairs expresses the opinion that the Act will be amended as desired.

Davis
  1. Of Feb. 25, 19250; 41 Stat. 437.