867.602/101: Telegram
The Secretary of State to the Special Mission at Lausanne
232. Mission’s 518, July 10. Referring to proposed paragraph (b), article 2, of modified text.34 While from American point of view Montagna’s suggestion is correct that Said Halim’s letter of June [Page 1031] 28, 1914,35 does not legally constitute a grant, yet we cannot accept further his deduction that the proposed phraseology leaves American interests unprejudiced. The allusion to the rights of the Turkish Petroleum Company alleged to have been accorded in 1914 would be meaningless except as an attempt to get a confirmation of those rights. The intention and serious purpose of the parties to a treaty furnish the basis upon which the treaty must be construed. In view of the known facts and claims, therefore, if we contend that the proposed clause would be inoperative for want of recognized rights, when its plain meaning is to confirm rights, we should be putting a construction upon the clause which it would be difficult and unpleasant to maintain. We shall be greatly embarrassed in maintaining later on that the Turkish Petroleum Company’s claims have not been validated, in so far as they can be validated by Turkey, if after the position we have taken and after our discussions we now make no objection to this clause. It seems necessary, therefore, to make objection and reservation.
Since the proposed clause frankly proposes to validate the alleged concessions to which we have constantly objected, this does not appear to be a genuine effort to meet our views. In objecting to a clause validating the rights of the Turkish Petroleum Company we are simply consistent, since for three years we have contested those alleged rights. I see no reason, therefore, for hesitating to make our position known. If we now fail to state our objections, we should certainly appear either to have been taken in by Montagna’s well-meaning sophistry or to be relinquishing our former position.
The Turkish Petroleum Company’s alleged rights have been in dispute for so long that if the British are now successful in getting them validated that success would inevitably be regarded as an important diplomatic triumph. Such victory should not be won by our own surrender, and any reservation we make should be contrived as effectively as possible.
It would not suffice to limit our reservation to the protection of the vested interests of Americans in Turkey. For, unless the British give up their position in Mesopotamia and return that territory to Turkey, it is expected that the boundaries of Turkey will be so constituted as to leave outside of Turkish territory some of the important rights claimed by the Turkish Petroleum Company. Moreover, this Government has objected to the Turkish Petroleum Company’s concession as monopolistic in its application to Mesopotamian oil lands. This Government has steadfastly held, therefore, that the British Government is not entitled to a monopoly of the fruits of a [Page 1032] victory to which American arms have contributed, and to secure now monopolistic privileges for the Turkish Petroleum Company to the exclusion of American enterprise.
It has been from the beginning this Government’s contention that the letter of Said Halim does not constitute a grant of rights to the company, and that the question now under consideration is a question of new rights to be acquired through confirmation or otherwise. Accordingly, the United States has objected to monopolistic rights acquired to the exclusion of its own nationals in Mesopotamia, for although this country was not at war with Turkey, yet Turkey’s defeat was only made possible by America’s contribution to Germany’s defeat. This view was clearly presented by the Government of the United States in its correspondence with the British Government, and the British Government has conceded that it was not prepared to claim and would not claim any right to lay disabilities on citizens of the United States on the ground of the Allied victory over Turkey and the consequent British control of territory detached from the Ottoman Empire. In a note to Ambassador Harvey from the Foreign Office, dated 29th December, 1921,36 the British Government disclaims any wish to question the statement of the United States Government that the victory over Germany, in which the United States had participated, was in turn a contributory cause of the victory over Turkey. The British Government also emphatically disclaimed any intention to deny complete equality of commercial opportunity to American citizens or to exercise any discrimination against them. Having made this disclaimer, the British Government would not now be in a position to press for new rights which would exclude American citizens from the enjoyment of just and equal opportunities in regions such as Mesopotamia, that is to say in regions which have been, and still remain, detached from the Ottoman Empire. The question now turns, therefore, upon what rights may have been acquired earlier by the Turkish Petroleum Company. This Government has steadily maintained that no original rights inhere in the Turkish Petroleum Company. Now, however, an attempt is being made to render the American contention unavailing through a confirmation of the company’s rights in a treaty with Turkey, and it can then be claimed that the original grant has been validated anew. It is difficult to discover any other motive for the British attempt to obtain by treaty the confirmation of an alleged grant in territory no longer within the boundaries of Turkey. If the successor of the Ottoman Empire can be brought to confirm what is alleged to have originated under the Empire, it will then be possible to refute the American contention that the concession [Page 1033] is invalid and also to avoid the embarrassment of obtaining a new grant in Mesopotamia contrary to the principle which the United States has advanced and Great Britain has accepted.
Mention may also be made of a letter of April 30, 1923, from the British Ambassador at Washington to the Secretary of State.37 It is suggested therein that it might be useful if the Secretary could bring to the knowledge of those interested in the Chester project that Mesopotamia is not within the jurisdiction of the Angora Government which cannot therefore make grants in Mesopotamia. The Ambassador also expresses the hope that the Secretary will take occasion to make plain to those concerned that the British Government cannot recognize the validity of grants made by the Angora Government in Mesopotamia.
It would be difficult to reconcile these statements with any proposal to make, through the treaty with Turkey, a new grant to the Turkish Petroleum Company, and such a proposal must appear as an attempt by Great Britain to reach its ends by having the original grant validated.
A reservation should be made, therefore, containing the following points. First, that this Government objects to any arrangement relating to the Treaty of Peace which would impair the vested rights of American nationals in Turkey by an attempt to confirm the alleged rights of the Turkish Petroleum Company. Second, that since the alleged rights of the Turkish Petroleum Company refer to areas in Mesopotamia, and since this Government considers that the Company’s claims have no basis in any proper grant, the Government of the United States objects to and will be unable to recognize as valid any arrangement or agreement, relating to the treaty of peace, which attempts to confer upon the Turkish Petroleum Company rights which would prevent American nationals from enjoying the just and equal opportunity to which they, as well as British or other Allied nationals, are entitled in regions in any manner received or held as the fruit of a common victory.
There has been no opportunity to draft a formal reservation owing to the press of time. If circumstances should require you to act immediately you may state the views of this Government in the sense of the present instruction, and a written statement can be presented later on. The Department should be informed promptly of the course of events and of the time and manner which, in your opinion, should be chosen for presenting our reservations in writing.
Clause (c) is intended to cover the Samsun-Sivas railway, which is in a somewhat different case. No objection is raised to this clause on condition that it is understood first, that there is no prejudice to [Page 1034] the present rights of Americans and that consequently any dispute which may arise will be decided by the equities of the case; second, that any vested right of an American national will not be impaired by the new concessions which may be granted in the alternative under this clause; and third, that it is not intended to give preference to the Régie Générale des Chemins de Fer in any concessions for constructing or exploiting one or more parts of the Black Sea System, but simply to assure the Régie that it will be given an opportunity to submit bids on an equal footing with other interests.
Since the Chester project relates only to areas on each side of the proposed railway lines, it is not deemed to be monopolistic. It should also be borne in mind that this Government is unable to alter the position it has taken upon questions considered above even though negotiations are pending for an arrangement between American interests and the Turkish Petroleum Company. The arrangement contemplated might mitigate the monopolistic nature of the enterprise if it admits adequate American participation in such way as to be considered consistent with the principle of the open door. Nevertheless the concession must be dealt with according to its present status and without regard to a possible arrangement. This Government has always contended that either a new, valid, and nonmonopolistic concession should be obtained, or the old one retained only after it has been validated on such terms as would remove this Government’s objections.
This Government’s desire is, of course, to exclude the clauses with the objectionable features as reviewed above. You should, therefore, endeavor to obtain their rejection, and not simply confine yourself to recording your reservations and objections after adoption of the clauses.
In regard to Vickers-Armstrong concession, the Department is not sufficiently informed to express an opinion.
- The draft text of paragraph (b), as reported in telegram no. 518, July 10, from the Special Mission at Lausanne, read as follows: “The rights granted in 1914 to the Turkish Petroleum Company, Limited, are valid and maintained.”↩
- Quoted in note of Nov. 17, 1921, to the British Secretary of State for Foreign Affairs, Foreign Relations, 1921, vol. ii, p. 89.↩
- Foreign Relations, 1921, vol. ii, p. 115.↩
- Post, p. 1208.↩