890g.6363 T 84/271
The Secretary of State to the Associate General Counsel of the Standard Oil Company of New Jersey ( Guy Wellman )
Sir: The Department has received and read with interest your letter of April 1, 1927, informing it of the American Group’s recent [Page 823] negotiations with the stockholders of the Iraq Petroleum Company, Ltd. and of the result thereof. The Department understands from your letter, briefly, that the American Group is offered and, providing the Department raises no objection, will take up a 23¾% stock participation in the Company, the activities of which will be limited by the so-called “working agreement,” it being at the same time provided that the present shareholders in the Company and the American Group, if and when it becomes a shareholder, and their constituent members, if any, will be bound by the self-denying provisions of the 1912 and 1914 agreements of which copies were enclosed with your letter under acknowledgment. The Department notes also your statement that the effect of this last proviso, if adopted, would be to associate the American Group and its constituent members “with the three foreign groups and Mr. Gulbenkian in the joint operation of all areas available for operation by the Iraq Petroleum Company under this convention, and also such other areas under the Iraq Convention which the American Group and its constituent members, and the other groups of the Iraq Petroleum Company as well, might acquire through public offering.” The Department further notes that “there would not result any modification of the so-called open door plan adopted by the Iraq Petroleum Company under Article 6 of the Iraq Convention, because the plan would still be operative so far as all nationals, including American nationals, are concerned in respect to their right to submit bids for tracts or areas offered for sublease under that Article.”
In reply, I desire to express the Department’s appreciation of your courtesy in thus bringing to its attention the most recent developments in this matter and to inform you that in the light of the information submitted it perceives no objection on the grounds of policy to the American Group taking up the proffered share participation in the Iraq Petroleum Company, Ltd., on the basis and understandings thus recited. As you are aware, the Department does not of course in any way pass upon the business elements of the negotiations.
I am pleased to add, in accordance with your oral request of April 6, 1927, that, if the name of the Turkish Petroleum Company, Limited, has not been changed to “Iraq Petroleum Company, Limited,” you may make the necessary corrections in the foregoing paragraphs, informing the Department accordingly.
I am [etc.]
[In April 1928 Mr. Wellman submitted to the Department the final (March 30, 1928) print of the proposed agreement between the Turkish Petroleum Company and its respective shareholders, and also the certificate of incorporation (dated February 3, 1928) and by-laws of the Near East Development Corporation, the American Group. In a letter to Mr. Wellman of April 16, 1928 (File No. 890g.6363 T 84/320), the Chief of the Division of Near Eastern Affairs (Shaw) stated:
“The Department has taken note of the contents of these two documents as well as of the Convention of March 14, 1925, between the Turkish Petroleum Company and the Government of Iraq.
“With reference to your inquiry on April 10, 1928, concerning the attitude of the Department of State, I take pleasure in informing you that, in the light of the information at hand, the Department considers that the arrangements contemplated in view of the special circumstances affecting the situation are consistent with the principles underlying the open door policy of the Government of the United States.”]