891.6363 Standard Oil/304

The Secretary of State to President Coolidge

My Dear Mr. President: It has recently been brought to my attention that the Sinclair Oil Company has felt a certain dissatisfaction at what they consider their failure to receive proper support from this Department, particularly in connection with their effort to secure an oil concession in North Persia. In a letter I wrote to Mr. Harding under date of October 28, 1922, of which I attach a copy,9 I gave some of the details of the competition which had arisen in North Persia between the Sinclair and Standard Oil Companies, a matter which Mr. Archibald Roosevelt, of the former company, had laid before the President. In order that you may be fully advised I should be glad if you could find it possible to glance through that letter.

This Department’s attitude of impartiality as between the competing American companies, which I emphasized in that letter, has been scrupulously followed and I am now informing the Sinclair Oil Company that while I have no reason to believe that the Persian Government is in doubt on this point I am quite prepared to reemphasize this position through our Legation at Teheran and also to indicate that it is the Government’s policy to give appropriate diplomatic support to American interests abroad.

This general question raises a point which I feel to be of sufficient importance to bring to your attention; namely, the proper attitude of this Government toward American commercial enterprise abroad. From time to time there has been some dissatisfaction expressed in business circles because this Department’s attitude towards American business interests in the foreign field differs somewhat from the attitude in similar matters of the British, French and other European governments. The latter are not loath to interfere politically in support of the business interests of their nationals to a degree which is not followed by this Department. Our position is that we are always ready to give appropriate support to our nationals in seeking opportunities for business enterprise abroad, but we do not undertake to make the government a party to the business negotiations or use political pressure for the benefit of private interests in order to obtain particular concessions, or intervene in favor of one American interest as against another. We are persistent in our efforts to maintain the open door policy, or equality of commercial opportunity, but we do not attempt to assume obligations for the government, expressed or implied, which under our system we could not undertake to discharge.

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American companies which might prefer a policy of more direct interference on their behalf by the government are inclined, in my opinion, to overlook the fact that American prestige and reputation for fairness has been enhanced, and consequently business opportunities of our nationals have been increased, by the correct policy which this government has followed. I find that in many parts of the world American business is welcomed largely because foreign countries realize that they can deal with American interests on a business basis without fearing political complications.

It is hardly necessary to point out that the other course desired by some business men, intent on their own immediate interests, would not only be contrary to our traditions and foreign policy, but if persistently followed would involve us in political intrigues and in difficulties which other governments with different exigencies and aims find it impossible to escape and from which we have happily been free.

While I do not feel that the question presented by the informal representations on the part of the Sinclair Company calls for any other action than I have indicated above, I desire briefly to summarize our attitude should the matter otherwise be brought to your attention.

I am [etc.]

Charles E. Hughes
  1. Not printed.