861.6363/63
The Chairman of the Board of Directors of the Standard Oil Company of New Jersey ( Bedford ) to the Secretary of State
[Received May 6.]
My Dear Mr. Secretary: Referring to my conference with you yesterday regarding the matter of our interests in Russia, you will recall the statement cabled to us by Mr. Mowinckel, the head of our Italian Company located at Genoa, to the effect that he has good reasons to believe that the British Government officials have knowledge of and approve the negotiations in the interest of the Royal Dutch Company at Genoa with the Russian Soviet representatives regarding oil lands and Mr. Mowinckel’s recommendation that the United States Government should protest against the consummation of such agreement.
As reported in the press, this agreement contemplates a monopoly of the sale of all Russian oil by a syndicate in which the Soviets and the Shell Group are equal partners. While the effect of such an agreement does not, in terms, assume to dispose of the titles to oil lands, yet the result would be to take from us the right which we now have under our arrangement with the Nobel Group to purchase and export oil from the Nobel properties, in which we are equally interested with the Nobels.
With regard to the return to foreign owners of their property in Russia, the memorandum handed to the Soviet on the 3rd instant with the assent of the British Government does not contemplate a complete restoration of ownership and use of such property to the former owners. Under the proposed scheme, oil lands could be appropriated and under a zoning or grouping system could be [Page 787] allotted for operation to other interests than those who developed or operated them under the former Russian regime. Even assuming that any preference in such allotment would be given to former owners, this method would be unacceptable because the owner would naturally want his own property back and would not desire the properties of anyone else which might be as good, better, or very likely worse, than the properties which the former owner and his associates have picked out and developed. Furthermore, a recognition by foreign governments of such treatment of private property in any one country would be a dangerous precedent with regard to the treatment of foreign-owned property in some other countries.
With the opposition which Belgium, supported by France, has interposed to this scheme, a protest by the United States Government at this time, made through Ambassador Child at Genoa, and also possibly through the American Ambassador at London, would have perhaps a determining effect in preventing the virtual confiscation of private property. It is not, in our judgment, any answer to say that compensation made in Russian bonds for property thus appropriated would alter the fact of confiscation.
Speaking generally, we feel that there should be no attempt at the Genoa Conference, or through private agreement among the various nations, to exploit the resources of Russia, but that it should be understood a fair and equal economic opportunity should be observed by all concerned.
We think that this is the psychological time for the United States Government to express its views in reference to this matter, first because the opinion of the United States carries more weight than that of any other government, and second, because of the publicity already given to the matter, this country has in a sense been put on notice of apparently what is going on and if it registers no objection or expresses no opinion it would be very difficult to press an objection at a later day after the consummation of any agreement.
As illustrating the above point, we might mention the San Remo agreement regarding Mesopotamia, and the recent reported Italian agreement with the Turks. These are considered as accomplished facts and there seems no power in existence which can upset them or that can abrogate them.
In this connection it is particularly to be noted that the press dispatches from Genoa during the last few days have referred to the fact that Ambassador Child has denied that he has filed any protest against the proposed scheme or treatment of private property in Russia.
We, therefore, earnestly request that the United States Government should extend whatever assistance you may deem advisable in [Page 788] the protection of American interests in Russia. It is our conviction, also, that a protest as above indicated would be the most effective means for extending this aid.
If it should not be deemed advisable in your judgment that there were sufficient grounds or evidence to make a formal protest, still the time seems to be very opportune to give the Governments concerned an expression of the views of the United States Government in regard to this matter through its Ambassador,—an expression which might prevent consummation of these contemplated agreements.
I am [etc.]