871.6363/162
The Associate General Counsel of the Standard Oil Company of New Jersey (Guy Wellman) to the Secretary of State
[Received May 22.]
Sir: Referring to the proposed mining law now pending in the Roumanian Parliament, of which we understand the Department has a copy, the security of the investment of this Company in the Romano-Americana is threatened with confiscation, and our Roumanian subsidiary, of which this Company owns 100% stock interest, is even faced with forced liquidation after expiration of leases now owned, unless 60% therein is sold to Roumanian nationals within five years from the enactment of the proposed bill.
The provisions to which we beg to call the attention of the Department are the following: [Page 603]
- 1.
- Articles 35 and 36. These articles provide that leases will be granted only to Roumanian citizens, or Roumanian companies, of which at least 60% of the capital is owned by Roumanian nationals, and also of which the control and administration lie in the hands of Roumanian subjects. Since the adoption of the Roumanian Constitution of 1923, the subsoil has become the property of the State and no lease, or extension of existing oil leases, can be obtained except from the Roumanian Government. Therefore, at the expiration of our existing leases, which are generally of relatively short duration, the Romano-Americana will be forced to liquidation with the resultant sacrifice in values.
- 2.
- Articles 255 et seq. Rights acquired prior to the effective date of the new Roumanian Constitution are protected only if the owners file application for validation within one year, and the burden of proof in establishing these rights is thrown on the applicant. This provides that the rights must have been acquired in strict conformity with the previous laws or decrees and regulations, all working obligations must have been entirely met, and that the rights claimed are not in any way in conflict with the rights of the State. These articles are of the greatest importance in respect to the validation of leases of the Romano-Americana referred to fully in our letter to the Department of January 8, 1923.7 We beg to emphasize that the Romano-Americana might be unable, under these articles, to establish valid acquired rights in those leases and extensions of leases upon which it was unable to obtain validation, as required by the Roumanian law, because the Roumanian Government had discontinued the office of registration after January 1922.
- 3.
- Article 202. Provides that the exploitation of all pipe lines from the tanks in the fields to storage depots or refineries are reserved for the State, and that existing pipe lines may be expropriated by the State. No provision, however, is made for compensation to the owners of expropriated pipe lines. The Romano-Americana has now restored, and has in operation, about seventy-five miles of pipe lines which would be thus affected.
- 4.
- Articles 264–272 et seq. These articles raise a serious question as to the possibility of carrying leases in reserve for future operation, and even imperil the holding of some leases already acquired but not actually drilled or operated.
- 5.
- The projected “Law For the Commercialization of Enterprise,” and Articles 205 and 206 of the proposed Mining Law, provide for the distribution of products in domestic trade in Roumania by an association administered by Roumanians. This arrangement would [Page 604] subject the sale of products of the Romano-Americana destined for domestic trade to regulation by the Roumanian Government as to price and quantity.
These objections indicate the extreme gravity of the situation which confronts the investment of this Company as an American interest in Roumania. We are advised today that there is a likelihood that this mining law will pass the Roumanian Parliament after the Roumanian Easter Holidays, or during the latter part of this month.
With the concurrence of the Department, we request that the American Minister at Bucharest be instructed by cablegram, at our expense, to oppose strongly the enactment of the objectionable features of this proposed mining law, and to co-operate in that respect with the local management of the Romano-Americana.
Respectfully yours,
- Not printed.↩