856d.6363/535

The Secretary of State to the Minister in the Netherlands (Tobin)

No. 592

Sir: Reference is made to your despatch No. 1553 of July 10, 1928, with which you transmitted copies and translations of certain communications exchanged between the Legation and the Foreign Office with regard to the question of reciprocity in petroleum matters between the United States and the Netherland Government. As was indicated in the Department’s telegraphic instruction No. 28, of June 29, 4 p.m.,24 it had been hoped that the Netherland Government would not make of record the statements contained in memorandum No. 21433 to the effect that American companies with Dutch capital desiring to obtain and operate leases on the public lands of the United States run grave risks by the absence of legal security. However, since the Netherland Government has included these incorrect statements in its memorandum of July 10 the Department finds it necessary to instruct you to make reply thereto. The Department accordingly encloses a memorandum on this subject for communication to the Netherland Government.

In handing the memorandum to the Foreign Office you should point out orally that although this Government has found it necessary to make reply to the memorandum of July 10 it is not done in a spirit of controversy but merely for the purpose of record. You may also indicate that should the Netherland Government be willing to withdraw the memorandum in question, you are authorized to withhold the enclosed memorandum. The Department would, of course, prefer the latter course.

I am [etc.]

For the Secretary of State:
W. R. Castle, Jr.
[Page 405]
[Enclosure]

Memorandum To Be Submitted to the Netherlands Ministry for Foreign Affairs

In memorandum No. 21433 of July 10, 1928, the Royal Ministry of Foreign Affairs made statements to the effect that American companies with Dutch capital desiring to obtain and operate leases on the public lands of the United States run grave risks because of the absence of legal security. Since, notwithstanding the explanations on the subject given by representatives of the Government of the United States in the course of the conversations which have taken place both between the Royal Ministry and the American Legation and between the Department of State and the Netherland Legation at Washington, these statements, which are incorrect, have been made of record, the Government of the United States is constrained to make the following comment.

(1)
The statement that a company operating an oil concession granted by the Federal Government on public lands of the United States must conform to the general laws enacted by the State where the concession is situated is ambiguous. If it is meant that petroleum concessions on public lands of the United States conferred by the Federal Government are regulated by the laws of the State where a given concession is located, the statement is absolutely incorrect. It is likewise incorrect to state that a State may, through its legislation, make it practically impossible to work a concession on Federal public lands. The jurisdiction over and control of Federal public lands is exclusively vested in the Federal Government, and the States have no control whatsoever over concessions on such lands.
(2)
An American citizen may not contest the legality and validity of a concession that has been granted on the Federal public lands unless such person has a prior valid claim in respect of such land. Such claims as have arisen have in almost all cases been decided by the appropriate Executive Department of this Government without recourse to the courts. Furthermore, any such claims that may exist would be heard by the appropriate Executive Department before a concession or lease is granted.
(3)
It is not clear what the Royal Ministry means by its statement that the present Government of the United States can not, with regard to the enforcement of the Mineral Leasing Act, bind any other but itself and that a succeeding administration might be of a different opinion concerning the interpretation and enforcement of that law, the consequence of which might be that American companies with Dutch capital would no longer be granted concessions on the public lands. The Mineral Leasing Act of February 25, 1920, is a permanent Federal [Page 406]statute and can only be changed by the Congress of the United States. A lease of the Federal public mineral lands of the United States is granted for a period of 20 years, with a right of renewal in the lessee, and such lease can not be invalidated except for non-compliance with its terms and then only by means of appropriate legal proceedings in the proper courts of the United States. The Government of the United States has always stood for the policy of the open door and equality of opportunity. Although it is, of course, possible that the Congress of the United States, at some future time, may alter existing legislation, just as the legislature of the Netherlands or some other country may modify the laws of the respective countries, the American Legation perceives no reason to anticipate that that position on the part of the Government of the United States is likely to be changed thereby.
  1. Not printed.↩