Papers Relating to the Foreign Relations of the United States, 1926, Volume II

890g.6363 T 84/236: Telegram

The Ambassador in Great Britain ( Houghton ) to the Secretary of State

[Paraphrase]

London , January 8, 1926—4 p.m.
[Received January 8—3:30 p.m.]

5. Department’s telegram No. 372 dated December 31, 9 p.m.¹ Late yesterday I saw Tyrrell² who informed me that the Prime Minister³ had decided that the situation must be promptly cleared. Tyrrell said that Gulbenkian⁴ had agreed to arbitrate and thought the Royal Dutch group would assent. The Anglo-Persian group has not given its assent. I asked Tyrrell if he thought that all four groups would agree to arbitrate. He replied that he had no reason to doubt that they would.

However, I have received information which is exactly to the contrary. Yesterday Montagu Piesse, attorney for the Standard group, saw me and stated flatly that owing to the undeveloped nature of the territory arbitration was impossible, and that none of the groups would arbitrate. If Piesse is speaking from knowledge, the present difficulty centers about the efforts of the groups involved to exclude Gulbenkian from royalty in territory other than that embraced by the Turkish Petroleum Company concession. Gulbenkian states that he originally held prior rights to the entire territory involved and that the groups’ action in limiting the present scope of the Turkish Petroleum Company concession to twenty-four parcels of land is simply a scheme to obtain for themselves the remainder of the territory without royalty. Apparently Gulbenkian’s position has a legal foundation. Therefore, a refusal on the part of the American interests to arbitrate, if the others agree to do so, will mean on its face either an attempt to force the Government of Great Britain to deny Gulbenkian his legal rights or an intention to withdraw from the negotiations entirely.

Chamberlain’s⁵ return to London is not expected until early in February.

Houghton

1. Ibid., p. 245.
2. Sir William G. Tyrrell, British Permanent Under Secretary of State for Foreign Affairs.
3. Stanley Baldwin.
4. Calouste Sarkis Gulbenkian, naturalized British subject, a minority stockholder in the Turkish Petroleum Company.
5. Sir Austen Chamberlain, British Secretary of State for Foreign Affairs.