Memorandum by the Assistant Chief of the Treaty Division (McClure)

Mr. Petala4 called at the Treaty Division by appointment this morning and quickly indicated that his object was to discuss the proposal made by his Government, set forth in the Legation’s note of August 23, 1928 (711.7112A/9)5 to the effect that the Treaty of Arbitration under negotiation between the United States and Rumania should provide specifically that its provisions are concerned only with differences between Government and Government, in other words, not private disputes between individuals.

The conversation, except in one particular, did not develop anything which had not been developed in the conversation with the Chargé d’Affaires of Rumania held in this Division on August 23, 1928. Mr. Petala apparently desired to expedite an answer. He stated that his Government had telegraphed to find out what the attitude of the United States would be. I told him that the decision of the Department would have to be made by the Secretary and that the Secretary would be in his office again next week. At what time he would be able to handle this matter I could not forecast, but that probably it might be placed before him within a short time after his arrival. Mr. Petala requested that he be given another opportunity to state his case orally before we should reply in writing to the Legation’s notes of August 18 and August 23, 1928.6

It will be recalled that the note of August 23, in introducing the Rumanian proposal to state specifically in the Treaty that disputes to which the obligation to arbitrate applies must be inter-governmental, [Page 749] indicated that this would supersede the proposal of August 18 for the addition of a new article making arbitration inapplicable to disputes falling within the competence of a national court until after such court had rendered a final judgment. Mr. Petala discussed this at some length. He failed to dissent from my suggestion that a dispute originating as a private dispute might be made an inter-governmental dispute at any time simply by one or the other Government taking over the matter; consequently that a dispute between an American citizen and a Rumanian citizen or, especially between an American citizen and the Rumanian Government, might become a dispute between the two Governments at any time which the United States should choose to make it so. It was evident, however, that he desired to safeguard in the Treaty against a Government making such a dispute its own until after it should have been determined in the national court of the other country. In illustrating what he had in mind Mr. Petala suggested several different possible ways in which, in a practical way, a dispute such as he had in mind might arise and develop. One of these illustrations, which he said he proposed because it happened to occur to him personally, was a possible dispute between a private American organization which was interested in the exploitation of Rumanian oil on the one hand and the Rumanian Government on the other. He discussed the importance of petroleum in Rumanian economic life and expressed his Government’s desire to encourage the investment of American capital in Rumania. He also mentioned the disagreeable publicity that had occurred over the disputes that had existed in the recent past between American capitalists and his Government. He desired particularly to avoid such publicity in the future.

In response to my suggestion that delays sometimes occurred in courts, he undertook to state that Rumanian courts were required to come to a decision promptly when a case was before them. Mr. Petala, notwithstanding his statement about the illustration being a personal one, left no doubt that the desire of his Government to change the general language of the Treaty, is based upon its desire to avoid the arbitration of disputes that may arise in the future between American exploiters of Rumanian petroleum and the Rumanian Government. I suggested that perhaps there might be less disagreeable publicity and added encouragement to American capital entering Rumania if the means were at hand for bringing such disputes before an impartial tribunal. Mr. Petala did not seem to be impressed with this suggestion.

W[allace] McC[lure]
  1. Vintila Petala, Secretary of the Rumanian Legation.
  2. Not printed.
  3. Neither printed.