890g.6363 T 84/62

The President of the Standard Oil Company of New Jersey (W. C. Teagle) to the Secretary of State

My Dear Mr. Secretary: We are in receipt today of a cablegram dated December 12th, from Mr. Montagu Piesse, our London representative, of which we beg to enclose herewith a copy.

This cablegram is self-explanatory, but we might mention that Gulbenkian is an Armenian, resident of Paris, who, we understand, was entitled to a 5% participation in the Turkish Petroleum Company under an agreement made between the Anglo-Persian Oil Company, Ltd. and the Anglo-Saxon Petroleum Company, and we also understand that he has some association with the Royal Dutch interests.

We have not yet presented this proposal to the American Group, preferring rather to first get the State Department’s views. I am planning to be in Washington tomorrow and shall take the opportunity to see you and, if possible, obtain your views upon the points in the proposal which particularly concern the State Department.

In order to clarify our understanding of this proposal, we are telegraphing Mr. Piesse as follows:

“Referring your telegram December 12th, we assume that proviso which reads ‘that State Department undertake not to question title of Turkish Petroleum Company’ does not include the condition already imposed on American Group by State Department that Turkish Petroleum Company shall obtain ratification of its titles from Iraq or other Government concerned. Please confer with Anglo-Persian Oil Company Ltd. and telegraph me fully.”

Very truly yours,

W. C. Teagle
[Page 348]

The London Representative of the Standard Oil Company of New Jersey (Montagu Piesse) to the President of the Company (W. C. Teagle)

Harrison reports following agreement has been reached today between the Anglo Persian Oil Co. Ltd., and Anglo Saxon subject to agreement by other parties interested that participation of Turks (Turkish?) Petroleum Company in the future shall be altered as follows Anglo Saxon 24% French 24% American 24% Anglo Persian Oil Co. Ltd. 24% Gulbenkian 4% last non-voting; that the Anglo Persian Oil Co. Ltd. in consideration of the reduction of its present holdings to 24% be given agreement by the Turks (Turkish?) Petroleum Company whereby Anglo Persian Oil Co. Ltd. to receive free of cost 10% of the crude oil produced from the concessions and deliverable to the Anglo Persian Oil Co. Ltd. free of charge into the main pipe-line at the field. Anglo Persian Oil Co. Ltd. to have the right have this oil transported through the pipeline at cost price taking into account reasonable amortization also interest 6% per annum on the pipe lines net capital account from year to year. Your agreement to above can only be accepted subject to proviso that State Department will acknowledge above satisfying American claims to participation in oil resources of Iraq and that State Department undertake not to question title of Turks (Turkish?) Petroleum Company also that they advise promptly their representative at Lausanne of agreement reached. Harrison says above agreed with Anglo Saxon with utmost difficulty and trust to receive your prompt acceptance. He does not anticipate difficulty in getting acceptance of French and Gulbenkian. He asks that you get State Department through Lausanne to support strongly this arrangement to the exclusion of any other interests American or otherwise.

Montagu Piesse