Office of the Historian

861.602 Farquhar, Percival/23

The French Ambassador (Claudel) to the Secretary of State

[Translation4]
Washington, March 15, 1928.

Mr. Secretary of State: My Government’s attention has been called to a contract concluded between the Soviet Government and Mr. Percival Farquhar calling for an advance of $40,000,000 by the last-named party in consideration of a right to work, or share in, the steel works of Makieuka, and also the coal and iron mines of the same region. As there is a very large French capital interested in those concerns, the news of the contract naturally caused considerable concern in France.

From information given me orally by Mr. Castle,5 it appears that the opinion of the Department of State is that the clauses in the contract do not call for any transfer of real estate rights.

My Government, to which I did not fail to forward that opinion, instructs me to express its thanks to Your Excellency. It believes, however, that the possibility of a foreign group being granted a right to operate, or a share in the operation of, a business that belongs to Frenchmen, cannot be considered otherwise than an infringement of the rights of the former owners.

Under those circumstances, and taking particular note of the address of the Honorable Charles E. Hughes on May 18, 1922, before the Chamber of Commerce of the United States, and the press release of the Department of State of July 20, 1922,6 concerning instructions sent to the Chargé d’Affaires of the United States at The Hague,7 my Government understands that the assurances given by the Federal Government that it will not favor any arrangements entered into by its citizens with the Soviets in which the rights of citizens of other countries are infringed, applies to all cases of this kind, whether the rights resulting from the said contracts be of a real or personal character.

Accept [etc.]

P. Claudel
  1. File translation revised.↩
  2. William R. Castle, Jr., Assistant Secretary of State.↩
  3. See Foreign Relations, 1922, vol. ii, p. 823, footnote 44.↩
  4. Telegram No. 49, July 15, 1922, to the Chargé in the Netherlands, ibid., p. 821.↩