I have the honor to transmit herewith the text of the Note as delivered.
Copies were mailed to the Missions at Berlin, Paris, Rome and Berne, and
to the High Commission at Constantinople.
[Enclosure]
The American Ambassador (
Harvey
) to the British Secretary of State for Foreign
Affairs (
Curzon
)
London
,
November 17,
1921
.
No. 287
My Lord: I have the honour to advert to my
memorandum of August 24th last,29 in which, in
connection with the question of A mandates, I stated that my
Government was unable to conclude that any concession was ever
granted by the Turkish Government to the Turkish Petroleum Company
and would shortly take up the considerations which have been
advanced by His Majesty’s Government upon this subject.
In the Memorandum referred to, the position of my Government with
regard to its interest in the disposition of mandate territories was
again stated and it was assumed that by reason of the relation of
the United States to the victory over the Central Powers and in view
of the fundamental principles which have been recognized by His
Majesty’s Government, there would be no purpose in relation to any
of these territories to discriminate against the United States or to
refuse to safeguard equality of commercial opportunity.
The Government of the United States does not desire for its citizens
any special privileges in the mandate territories, and expects, of
course, that private rights actually acquired before the war will in
general be respected.
It is believed, however, that in the consideration of claims to
rights His Majesty’s Government would not entertain any desire to
exclude American interests from participation in the development of
any important resource, and will appreciate the justice of my
Government’s contention that the claim of the Turkish Petroleum
Company in particular, which relates to the entire petroleum
resources of Mesopotamia, should not be recognized except in
accordance with the principles which have been accepted by the
British Government as applicable to the mandate territories and on
the basis of a satisfactory determination of the character and
extent of the rights of the company.
Since it has seemed from Your Lordship’s most recent communication on
the subject that the views of His Majesty’s Government with regard
to this claim were widely at variance with those of my Government, I
was instructed to suggest in my Memorandum of August 24, 1921, that
if the claim of the Turkish Petroleum Company continues to be
asserted appropriate provision should be made for its determination
by a suitable arbitration.
[Page 90]
In a note dated February 28, 1921,30 Your Lordship was
good enough to set forth the various considerations upon which the
British Government based its opinion that the Turkish Petroleum
Company possesses rights in Mesopotamia. It was stated that the
concessions for the oil fields in the two vilayets of Mosul and
Bagdad were bestowed by the Sultan on his Civil List in 1888 and
1898 respectively, and that by firmans issued in 1908 and 1909 the
concessions had been transferred from the Civil List to the Ministry
of Finance. In the negotiations before the war between the British
and the German Governments and between each of these Governments and
the Turkish Government, the disposition of the oil fields of
Mesopotamia was under discussion, and a British Company, called the
Turkish Petroleum Company, was organized, representing the
amalgamation of German and British interests.
I shall not undertake to review what is said upon this subject in
Your Lordship’s note, as I do not find in Your Lordship’s recital
any suggestion that any negotiations which had thus taken place had
ripened into any agreement or concession prior to the summer of
1914. The question then comes to the effect of what was done in that
year.
It appears that Said Halim Pasha, to whom Your Lordship refers as the
Turkish Grand Vizier, addressed on June 28, 1914, a communication to
the British Ambassador at Constantinople, a part of which has been
stated by Your Lordship, and which is understood to have been
identical with a communication of the same date to the German
Ambassador at Constantinople. This communication, according to the
information in the possession of my Government, reads in translation
as follows:
“Mr. Ambassador:
“In your response to the note No. 985 which Your Excellency
had the kindness to address to me under date of the 19th
instant, I have the honor to inform you as follows:
“The Ministry of Finance being substituted for the Civil List
with respect to petroleum resources discovered, in the
vilayets of Mossoul and Bagdad, consents to lease these to
the Turkish Petroleum Company, and reserves to itself the
right to determine hereafter its participation, as well as
the general conditions of the contract.
“It goes without saying that the Society must undertake to
indemnify, in case of necessity, third persons who may be
interested in the petroleum resources located in these two
vilayets.
“Be pleased to accept, Mr. Ambassador, the assurance of my
very high consideration.
(Signed) Said Halim.”
[Page 91]
In Your Lordship’s note of February 28, 1921, it is further set forth
that during the war the German interests in the Turkish Petroleum
Company came into the hands of His Majesty’s Government by
liquidation, and have been allotted to the French Government in the
San Remo Petroleum Agreement, which is explained as the adaptation
of pre-war arrangements to existing conditions.
Your Lordship comes to the conclusion that the Turkish Petroleum
Company possesses a right to the lease of the oil fields of the two
vilayets of Mosul and Bagdad, resting on an official undertaking
given by the Turkish Government to the British and German
Governments after prolonged negotiations, and that neither the
rights claimed by the Company nor the provisions of the San Remo
agreement would preclude the Mesopotamian state from enjoying the
full benefit of ownership or from prescribing the conditions on
which the oil fields shall be developed.
Without entering into a detailed discussion of legal principles which
may be applicable, the Government of the United States is of the
opinion that the communication of June 28, 1914, from Said Halim
Pasha, even in connection with the communications to which it is
understood to have been a reply, cannot well be considered a
definite and binding agreement to lease. Since both the extent of
the participation of the Ministry of Finance in the operations of
the company and the general conditions of the lease were, according
to this communication, to be fixed at a later date by one of the
parties to the alleged agreement, there would seem to be room for
doubt whether, even if war had not intervened, a lease would
actually have been executed. As Your Lordship observes with respect
to the letter of June 28, 1914, the Ministry reserved “the right to
fix later on its share in the enterprise as well as the terms of the
contract.” There appears to be no reference in Your Lordship’s note
to the provisions of Turkish Law applicable to the execution of a
lease or to the transfer of a concession; and there is no
indication, if these provisions were intended to be disregarded,
that any progress had been made toward obtaining the approval of the
Turkish Parliament.
The relations between the Turkish officials concerned and the Turkish
Petroleum Company would appear, therefore, to have been those of
negotiators of an agreement in contemplation rather than those of
parties to a contract. Your Lordship makes no mention of any
communications subsequent to those of June 28, 1914; but from other
information in the possession of my Government it would appear that,
in later notes addressed to the Turkish Grand Vizier, the British
and German Ambassadors raised certain questions with regard to one
of the conditions indicated in that communication.
[Page 92]
It is hardly necessary to observe that in dealing with the resources
of mandate territories, placed under conditions of trusteeship,
there should be no consideration of alleged monopolistic claims
based on rights asserted to have been vested before the war, unless
such rights are established by convincing proof, and it is assumed
that this position would be taken by the British Government as a
mandatory power, irrespective of the question whether such claims
were advanced by British nationals. Hence, the immediate question is
one of the proof of the alleged prior contract and an examination of
the evidence thus far produced has not disclosed that any prior
contract was made with the Turkish Petroleum Company.
The Government of the United States does not believe that any
presumption should rest in favor of establishing in the mandate
territories arrangements which were merely under diplomatic
discussion before the war, but, on the contrary, is strongly of the
view that such contemplated arrangements of a monopolistic character
and inconsistent with the principles applicable to the mandate
territories should receive no sanction.
I am instructed to express again the desire of my Government that the
claim of the Turkish Petroleum Company, if it continues to be
asserted, should be determined by a suitable arbitration, which, it
is believed, should take place prior to any action which might
involve further commitments or in any way imply recognition of the
claim.
I may observe that the claim which is asserted by the Turkish
Petroleum Company in Mesopotamia is regarded by my Government as in
an entirely different category from the rights which are understood
to be possessed by an American company in Palestine. The latter are
apparently far from monopolistic and seem to have been regularly
granted according to the prescribed formalities of Turkish Law by
the proper authorities of the Turkish Government. Adverting further
to the suggestion in the note of February 28, 1921, that the
attitude of my Government with respect to the claims of the Turkish
Petroleum Company in Mesopotamia is scarcely consistent with its
position in regard to American rights in Mexico, it may be observed
that those of the latter which have been made the subject of
representations by my Government were not merely contemplated or in
course of negotiation but were acquired in apparently full
conformity with the local law.
In previous communications,31 my Government has made clear
its attitude toward certain British interests in Costa Rica and has
stated its policy with reference to an Act of the Philippine
Legislature relating to petroleum development, which is regarded by
Your Lordship [Page 93] as in
contradiction of the general principles enunciated by the Government
of the United States.
Shortly after the enactment in question, the Government of the United
States recommended that it should be so amended as to conform to the
reciprocity provision of the United States general leasing law of
February 25, 1920.32
At the last session of the Philippine Legislature an amending bill
was passed, the object of which was to relax substantially the
restrictions embodied in the original Act. Nevertheless, in the
opinion of the Government of the United States, the proposed
amendment did not sufficiently meet the situation; and Your Lordship
was informed in my Memorandum of August 24, 1921, that it was the
intention of my Government to take all appropriate steps with a view
to bringing about at the next session of the Philippine Legislature
a further amendment so that the Act may conform to the reciprocity
provision above referred to. My Government has already taken certain
of the steps which it deems appropriate, and believes that its
position with regard to the natural resources of the Philippines is
entirely consistent with the principles which it desires to see
applied in other territories.
I have [etc.]
