861.602 Farquhar, Percival/27
The Secretary of State to the French Ambassador (Claudel)
Excellency: I have the honor to acknowledge the receipt of your note of March 15, 1928, with reference to a contract recently concluded between the Soviet régime and Mr. Percival Farquhar, which, you state, has caused considerable concern in France in view of the extensive investments of French capital in the steel works of Makeevka and in the adjoining coal and iron mines.
You state that your Government considers that the contingent grant to a foreign group of the right to exploit, or to participate in the management of, an enterprise belonging to French nationals cannot be regarded otherwise than as prejudicial to the rights of the former owners and, referring to the press announcement of the Department of State of July 20, 1922, you declare that it is the understanding of your Government that the assurance given by the Government of the United States that it will not favor any arrangements entered into by its citizens with the Soviets prejudicing the rights of citizens of other countries covers all cases, irrespective of the personal or real character of the rights resulting from such arrangements.
With respect to the contract concluded by Mr. Farquhar with the Soviet authorities, I have the honor to advise you that Mr. Farquhar has been informed that the Department of State could not view with favor the project in question, which involved, among other things, the flotation in the United States of a loan for the purpose of making an advance to the Soviet regime.
As concerns the attitude of the Government of the United States towards arrangements concluded by American citizens with the Soviet authorities jeopardizing or prejudicing the vested rights of citizens of other countries in Russia, I may assure you that the position of this Government remains the same as that set forth in the Department’s press announcement of July 20, 1922.8
Accept [etc.]
- In despatch No. 3864, Aug. 29, 1928 (not printed), the Ambassador in Germany reported that the Farquhar project had been rejected by the Leningrad commission on technical grounds (file No. 861.602 Farquhar, Percival/35).↩