The Secretary of State to the Chargé in the Netherlands (Norweb)
6. It has been stated by representatives of the Standard Oil Company that reports are being circulated in the Netherlands concerning possible legislation in the United States applicable to Naval Oil Reserves in such a manner as possibly to prejudice favorable action next week in the Dutch Parliament on the Koloniale concessions. The facts, which are given for your information and discreet use if necessary, are as follows:
It is contemplated by the Navy Department to recommend legislation which would apply to Naval Oil Reserves with reciprocal provisions similar to those contained in the General Leasing Act of February, 1920. These reserves constitute less than two per cent of the total proven oil lands of the United States totaling only about 50,000 acres. It is the present intention of the Navy to make no further leases covering naval oil lands to anyone. Legislation, it is understood, is sought only to lay down a permanent policy.
That the information outlined above has no present and probably no prospective application to Dutch interests, will be readily appreciated.
Some questions have been raised in the press with regard to arrangements made by the Honolulu Oil Company for the sale of oil that has been produced from lands leased on Naval Reserve No. 2. The Dutch Shell is now purchasing some of this oil under contract. It is alleged that sales of some of this oil have been made to Japan. Of course, existing lawful contracts will not be interfered with by the Government, and no action is contemplated with regard to this matter so far as the Department knows. In case reports on this subject are current, telegraph promptly and specific comment will be made by the Department for your guidance. Report briefly by telegraph.