867.602 Ot 81/304
Memorandum by the Chief of the Division of Near Eastern Affairs, Department of State (Dulles)
On April 11th and again on April 12th, General Goethals called to see me and to inquire as to the attitude of the Department towards the Chester concession. I told the General that we had as yet no details of the reported grant although we had received a copy of the concession as drafted on February 20th.55 At his request I left with him a copy of the two contracts and the preliminary agreement.
General Goethals said that he expected the Department to give vigorous support to the concession and referred particularly to the question of Mosul, inquiring whether we would be prepared to support their claims as against the British interests in this area. I referred General Goethals to my talk with Mr. Colby Chester; said that I understood the Company would submit a statement of their views with regard to their claims in this area. I added that he was probably familiar with the policy the Department had followed in declining to interfere with regard to territorial settlements in the Near East and that the question of the disputed rights in Mosul might depend upon where the frontier between Turkey and Iraq was eventually drawn; that this was a matter, which according to the Lausanne negotiations, was to be decided between Great Britain and Turkey.
General Goethals told me of a conversation he had just had with the French Ambassador. He called to see the Ambassador to take up the question of the development of the Rhone. After they had discussed that question, the Ambassador questioned him about the Chester concession. General Goethals replied that he had very little information as to the exact nature of the grant and therefore did not feel qualified to discuss it. Ambassador Jusserand pressed him for an answer, and particularly inquired whether the Chester interests maintained that this was a confirmation of a previous grant or was a new concession. General Goethals (who indicated to me that he did not have a very thorough knowledge of the facts in the case but said that he felt it was desirable to answer the Ambassador’s inquiry) stated that in his opinion it was a confirmation of a previous grant. General Goethals informed me that in talking with the Ambassador he made the statement that it would be his desire to interest British and French capital in the project under an American controlled company. The Ambassador inquired whether he could telegraph this to his Government. General Goethals replied that he was free to telegraph anything which he had told him.
[Page 1201]In explaining to me his conversation with the Ambassador, General Goethals said it would be his policy to make friends rather than enemies and that for this reason he would be disposed to interest other capital; that he already had approached a French group and that he planned to do the same with British interests. He emphasized that the British interests which he would desire to associate in this Company would not be the Anglo–Persian Oil Company.
General Goethals also remarked that Admiral Chester desired to go to Lausanne to support his interests there and asked my opinion. I said that while the Admiral was a free agent to go where he pleased, I could not see how his interests would be advanced by the trip suggested. Our representatives at Lausanne were not there to support particular concessionary interests but all American rights and that to inject the Chester concession unduly into the negotiations through the presence there of the Admiral might prove unfortunate. If he had a concession why discuss the matter—it would seem the part of prudence to avoid rather than provoke any international discussion of the subject.…