851.6363 Import Law/7
The Ambassador in France (Herrick) to the Secretary of State
[Received February 24.]
Sir: I have the honor to refer to my telegram No. 41, February 14, 11 A.M.,39 concerning conversations with our Chargé d’Affaires at Madrid and action taken by this Embassy with reference to the Spanish oil monopoly. As indicated in this telegram, Mr. Blair reported encouraging developments in London in the sense that, while it seemed that the British Foreign Office had theretofore not been fully informed as to the situation in Spain, it now, as a result of fuller information, appeared inclined to take a more active interest in the situation and to stiffen its attitude. In view of the Department’s telegraphic instruction [Page 838]to Madrid No. 14, of February 1,40 (now made part of this Embassy’s archives by authority of the Department’s telegraphic instruction to Madrid No. 15, February 241), empowering this Embassy in its discretion to discuss this question informally with the Foreign Office, it seemed advisable to do so. Accordingly, a member of my staff had a conference with M. Corbin, the new director of Political and Commercial Affairs, in which he informed him of the latest developments in London, and having in mind the Department’s instruction No. 2607 of February 2, 1928,41 emphasized our desire to act in close accord not only with the French but also with the British, if they should come around to taking the view of the situation already held by us and the French, and the desirability of the French Embassy in London doing what it could to bring the British into line with a view to strong and concerted action. M. Corbin expressed himself as glad to receive this information and as in agreement with the views expressed.
The moment seemed particularly opportune to discuss this matter with the Foreign Office inasmuch as there is reason to fear that the French Parliament is about to take under consideration legislation governing the importation of petroleum into France of a most harmful character to American interests, and the more the Foreign Office could be gotten on record as condemning all phases of the iniquitous action of the Spanish Government concerning oil, the more the Embassy’s task might be facilitated if and when it should become necessary to protest informally on behalf of American oil interests against proposed French legislation.
The latest adverse development is the following: Reference to the Embassy’s despatches Nos. 8045 of November 18, 8052 of November 21, 8077 of December 1, 1927,42 show the situation down to the end of the year, the last mentioned despatch giving the text of the Bill introduced by the Government. The Embassy’s despatch No. 8269 of January 20, 1928,41 then showed that, when the Petroleum Committee of the Chamber was to consider this Bill, the Government’s candidate, M. Chariot, was elected reporter against the opposition radical candidate. There was reason to hope and believe that the Government reporter would report favorably upon the Bill introduced by the Government. Unfortunately, however, such has not proven to be the case. The Embassy is informed that M. Chariot has now prepared a Bill, which he is about to submit to the Petroleum Committee, with the following two chief vicious amendments to the earlier Government Bill.[Page 839]
- First: Instead of allowing companies already in business here to obtain a license for future importation equal at least to the maximum figure of their annual imports during the last five years, (Article 5 of the old Bill), the license figures now are to be based on their average annual imports during the last five years. The inequity of this resides in the fact that as the American and English companies, openly aimed at by this amended Bill, only began their operations after the war, an average of the last five years necessarily includes some of their leanest years and in no way corresponds to the present volume of business, let alone the reasonable expectation of normal increase.
- Second: After the basic licenses, preference in surplus allotments to meet increased consumption is to be given first to French refineries and next to French importing companies. “French” as used in the Bill means corporations at least 51% of whose stock is owned by, and the majority of whose Board of Directors is composed of, French citizens.
It seems unnecessary to comment on the frankly discriminatory nature of such proposed legislation and on the danger of such theories, should they meet with any measure of success in the present case, being extended in unlimited fashion to other fields of industry and finance.
The Embassy is further informed that the consideration of this amended Bill by the Chamber Petroleum Committee is very imminent; in fact it had been expected that the Committee would take it up on each of the last few days. I shall of course report further to the Department, by telegraph if necessary.
I have [etc.]