867.77/372

The Consul General at Berlin ( Coffin ) to the Secretary of State

Sir: I have the honor to acknowledge receipt of the Department’s telegraphic instruction No. 548, of March 26th [28th] 6.00 P.M.,23 with reference to the assertion contained in the reply of the British Government, dated February 28th last24 to the Department’s note of last November, on the subject of Mesopotamian oil fields.

Although I was convinced that no additional information could be obtained on this subject further than that already furnished to the Department, I requested the Deutsche Bank to invite Mr. F. J. Gunther, now residing in Dresden, and who is General Director of the Anatolian Railway, to come to Berlin for a further conference on the matter. Mr. Gunther represented the German interests in the negotiations which took place at Contantinople during the year 1914 between the German and British groups and the Ottoman Government. He is thoroughly familiar with all the circumstances of these negotiations.

Mr. Gunther reached Berlin on April 1st, and I went into the matter thoroughly with him. As a result of our conversation I telegraphed the Department yesterday to the effect that no concession was ever granted to the Turkish Petroleum Company, and that the British claim, as set up in the note of the British Government, dated February 28th, rests solely on the letter of the Grand Vizier, dated June 28, 1914. The Department was furnished with a copy of this letter and a report of the circumstances in my despatch of August 4, 1920.25

There is little to add to that report, but I may say that the draft of the concession which I forwarded to the Department at the same time contained the terms which the German and British interests, represented by the Turkish Petroleum Company, intended to make the basis of their negotiations with the Sublime Porte for the oil concession. This draft, as the Department will note, is dated at London on April 3, 1914. The Deutsche Bank informs me that the draft of this concession contains every possible privilege which the two groups could think of, and that they anticipated that the negotiations which would result in the final concession to be issued would be prolonged for many months, and they never anticipated that they would be able to obtain all favors which they embodied in the draft concession.

[Page 86]

Mr. Gunther informs me that the letter of June 28th from the Grand Vizier is entirely correct in that the Ottoman Government agreed, in principle, to grant a concession to the Turkish Petroleum Company. This, in fact, was agreed to, verbally, between Mr. Gunther and Mahmoud Shefket Pasha when the latter was Grand Vizier. A short time prior to his assassination he informed Mr. Gunther that the Sublime Porte was willing to accord the concession to the German–British group, and the necessary formalities could be arranged as soon as the German–British group could reconcile their own interests. As the Department is aware, the negotiations between the British and the Germans had covered a very long period, and embraced very serious political and economical questions. They had been concluded in 1914 and, as a result of the agreement, matters were rapidly coming to a head when the war broke out. The letter of June 28th is, however, nothing more than an undertaking to issue a concession at a later date under terms and conditions to be arranged. It is entirely possible that the British-German group might have been unable to reach an agreement with the Turkish Government, and the undersigned can hardly conceive that the letter of June 28th could be held to bind the Ottoman Government to the issuance of a concession, except, possibly, under such terms and conditions as the Ottoman Government saw fit to impose, which might well have been so onerous as to preclude the possibility of a profitable working of such a commercial enterprise.

I have [etc.]

Wm. Coffin
  1. Not printed.
  2. See telegram no. 160, Mar. 1, from the Ambassador in Great Britain, supra.
  3. Foreign Relations, 1920, vol. ii pp. 660662.