The President of the Sinclair Consolidated Oil Corporation ( H. F. Sinclair ) to the Secretary of State

Dear Mr. Secretary: The Sinclair Exploration Company, a subsidiary of this Corporation, has been conducting negotiations over a period of several months with official representatives of the Far Eastern Republic for a grant of the right to conduct explorations for petroleum on the Russian part of the Island of Sakhalin. These negotiations have now reached the point where a preliminary contract, covering the general terms of the operation, may be executed, within a short time. The terms proposed are, we believe fair and advantageous to both parties, and the concession involved holds the promise of being of first class importance.

The preliminary contract, if executed, must be followed by a more formal and definitive arrangement entered into and confirmed by the requisite authorities at the seat of government of the Far Eastern Republic before any active exploration work can be attempted. We have reasonable assurance that this formal arrangement can be consummated if we desire it.

The Russian part of the Island of Sakhalin is now under military occupation by the Japanese. We have assumed that the execution of a preliminary contract with the Far Eastern Republic will raise no international questions; but entering upon a final arrangement with that Republic and following such arrangement by an attempt to explore might give rise to developments of some significance. We have, therefore, thought it proper to present the situation to you for consideration, having previously conferred with Messrs. Poole and Jamieson of your Department so as to save your time in the matter of details.

It is our present belief that the Sakhalin concession is one of outstanding importance, having in mind the interests of the United States Government as well as those of this Corporation, but we do not wish to risk creating embarrassments for you by activities that you may have reason to consider ill-timed.

We shall, therefore, be grateful for such advice or suggestions as you shall choose to offer.

I am [etc.]

H. F. Sinclair