The Minister in Albania (Grant-Smith) to the Secretary of State

No. 6

Sir: I have the honor to report that Mr. Soper, representative of the Sinclair Oil Company is in receipt of a telegram to the effect [Page 608] that owing to present unfavorable conditions now reigning in the financial market in the United States with reference to the Balkans, Messrs. Blair & Company do not find it possible to negotiate a loan with the Government of Albania.

In view of the fact that the grant of a concession for prospecting for oil throughout the country has been made dependent upon the Sinclair Company’s obtaining a loan for the State, Mr. Soper is now endeavoring to secure a postponement of the granting of any concession in that regard until March next when the National Assembly is expected to reconvene. In the meantime he is in hopes that the financial situation may have become so far ameliorated as to make it possible for his principals to authorize him to make a definite proposal for a loan.

Mr. Gallagher of the Standard Oil Company of New York has returned to Tirana and expects the early arrival of his chief Mr. Sheffield, thus placing two American groups in the field of competition.

The Anglo–Persian agents continue to be active and M. Jaquet a geologist, accompanying M. Justin Godart, the author of a well known Albanophile work and who in consequence is in high favor here, has arrived from Paris, who, I am informed, is endeavoring to secure an oil concession for a limited area near Valona.

Now that the Sinclair Company finds itself all but deprived of the persuasive influence of a prospective loan the contest obviously resolves itself into a question of which group will offer the most generous terms. The element of personal influence is also of much importance here, as in all countries of this category and for the moment M. Jaquet, supported by M. Godart, would seem to enjoy the rosiest prospects provided, of course, his offers do not fall too strikingly below those of his competitors.

I have suggested to Mr. Soper and Mr. Gallagher that they might point out, in addition to the political aspect, the eventual advantages which would accrue to Albania through interesting American capital at the outset because, immediately oil is discovered in commercial quantities loans would be forthcoming and that they could obviously be negotiated to better advantage and in larger proportions in a country which was not burdened with debt but whose bankers were seeking well secured investments, especially in countries where their capital was already engaged.

I have [etc.]

U. Grant-Smith