871.6363/167
The Minister in Rumania (Jay) to the
Secretary of State
Bucharest,
March 29,
1924.
3
No. 582
Sir: I have the honor to refer to the
Legation’s Despatches No. 522 of January 18, 1924,4 No. 495 of December 10, 1923,
and to the Department’s telegram No. 44 of November 22, 1923, concerning
the proposed Rumanian Mining Law.
A translation of the draft of the new mining law, which is understood to
have been prepared by the present Government, was presented to me March
26th by the acting head of the Romano-Americana Company, Mr. Woltman;
together with a summary of certain of the most objectionable provisions
of the law. As the draft of the law fills 97 typewritten sheets, single
spaced, it has been impracticable to have it copied at the Legation,
therefore only the copy furnished by Mr. Woltman is herewith enclosed
(Enclosure No. 1).4 There
are being sent forward, in quintuplicate, the extracts of the clauses
considered objectionable, covering 13 pages (Enclosure No. 2),4 also a summary of the
case against the proposed law (Enclosure No. 3),4 prepared and copied for the
Legation by the Romano-Americana Company.
[Page 600]
On the receipt of these communications I was informed that the passage of
the law had been scheduled by the Rumanian Government for the middle of
April, and that grave anxiety was felt by the American Oil interests
over this prospect. I immediately consulted with my British, French, and
Netherlands Colleagues, whose respective countries represent the
principal foreign oil interests in Rumania. The British Minister, who
did not appear to be very conversant with the specific terms of the
draft, told me that, from what he knew of the proposed law, he saw no
serious grounds for protest. The French Minister, however, had studied
an earlier draft of the law, of which he had transmitted a copy to his
Government, and he was awaiting instructions on the matter. He agreed
with me that some of the provisions of the proposed law were intolerable
for foreign interests and hoped that he would soon be authorized to make
vigorous representations against the law in its present form. The Chargé
d’Affaires of the Netherlands made about the same statement.
In view of the Department’s telegram No. 44 of November 22, 1923, 4 P.M.,
I have deemed it advisable to present to the Minister for Foreign
Affairs a Note expressing the serious apprehensions felt by American
petroleum producers in Rumania as to the possible enactment of the law
as it now stands, particularly because of certain provisions. …
I have [etc.]
[Enclosure]
The American Minister (Jay) to the Rumanian Minister for Foreign Affairs
(Duca)
Bucharest, March 29,
1924.
[No. 36]
My Dear Mr. Minister: My attention has just
been called to a draft of a mining law recently made public and
reported to have been prepared by the Rumanian Government with a
view to its early enactment.
Inasmuch as certain provisions of the proposed law would, if enacted
and enforced, seem to me to furnish grounds for serious apprehension
on account of the American interests affected, I take the liberty of
bringing to Your Excellency’s personal knowledge, in this somewhat
informal manner, the grave anxiety felt by American petroleum
producers in Rumania in regard to this matter. I may add that I feel
this anxiety would be shared equally by my Government if it learned
that the Rumanian Government had the intention of applying to
American Petroleum Companies some of the measures contained in the
draft of the mining law to which I have the honor to refer
herein.
[Page 601]
Of these provisions I shall only mention two which appear
particularly susceptible to well founded objections. The first is
that which requires foreign petroleum companies operating in
Rumania, in order to obtain new oil lands, to convert, within a
period of five years, all their capital stock into nominative
shares, 60% of which must be owned and controlled by Rumanian
subjects. As the proposed law makes no provision for the payment of
adequate compensation for the 60% or more of stock in American oil
companies operating in Rumania thus to be assigned to Rumanian
nationals, it is not clear how such American Companies, complying
with this law, as their continued existence would necessitate, would
be guaranteed against the confiscation of their property without due
compensation.
In this connection I deem it pertinent to remark that, while American
oil companies, which have been operating in Rumania for over 20
years under charters and in accordance with the laws, have
understood from their inception that they were subject to such
Governmental regulation, control, and taxation as the Rumanian State
might see fit to impose, it has never been understood that companies
once authorized by law to incorporate and do business in a foreign
country under American ownership would be subjected to the
alienation of any part of their property through an act of the
State, except by way of reasonable taxation, or by due process of
law and on the basis of adequate compensation being paid.
Secondly, I learn that rights to oil producing properties already
acquired by foreign companies must, under the proposed law, be
submitted to the appropriate authorities for registration and
validation. It is, obviously, a proper exercise of Governmental
control to require the registration of the acquisition of rights to
oil bearing lands, but it seems appropriate to add in this
connection that it has been understood that property rights acquired
in good faith and due legal form by American citizens would always
be respected by the Rumanian Government. It would seem, therefore,
that where good title to, and possession of, oil rights have been
legally acquired by American Companies and duly registered, the
question of present and future ownership thereof, should, subject to
the provisions only of laws in force at the time such rights were
obtained, be considered res adjudicata.
I refrain from pointing out many other provisions in the draft of the
proposed law, of a highly technical and complicated character, which
seem manifestly discriminatory and unsatisfactory.
In bringing to Your Excellency’s attention the foregoing
considerations I take occasion to express the hope that it is not
the intention of the Rumanian Government to pass any legislation of
the character just described or otherwise of such a nature as to
impair legitimate property rights and interests of American citizens
in Rumania.
Be pleased [etc.]
