890g.6363 Getty Oil Company, George F./6

The Acting Secretary of State to the Consul at Baghdad (Sloan)

Sir: The Department has received and read with interest your despatches No. 11 of January 25 and Nos. 16 and 19 of February 2, 1930,37 concerning developments in the petroleum situation in Iraq, with especial reference to the recent visit of Mr. H. M. Macomber on behalf of George F. Getty, Incorporated.

In order that you may understand the attitude of this Government with reference to the entrance of American petroleum companies into the Iraq field, there are set forth below certain of the considerations that the Department has had in mind in connection with this question.

As you are aware, extensive correspondence on this subject was exchanged between the Department and the British Foreign Office during 1920 and 1921.38 The viewpoint of the United States with respect to the economic development of Iraq and other similar territories was set forth originally in a note handed to the British Secretary of State for Foreign Affairs by the American Ambassador in London on May 12, 1920.39 In that note were recited certain propositions which embodied or illustrated the principles which the United States Government desired to see applied in certain of the regions detached from the former Ottoman Empire. Among these propositions were the following:

“That there be guaranteed to the nationals or subjects of all nations treatment equal in law and in fact, to that accorded nationals or subjects of the mandatory power with respect to taxation or other matters affecting residence, business profession, concessions, freedom of transit for persons and goods, freedom of communication, trade, navigation, commerce, industrial property, and other economic rights or commercial activities.”
“That no exclusive economic concessions covering the whole of any mandated region or sufficiently large to be virtually exclusive shall be granted, and that no monopolistic concessions relating to any commodity or to any economic privilege subsidiary and essential to the production, development, or exploitation of such commodity shall be granted.”
“That reasonable provision shall be made for publicity of applications for concessions and of governmental acts or regulations relating to the economic resources of the mandated territories; and that, in general, regulations or legislation regarding the granting of [Page 310] concessions relating to exploring or exploiting economic resources, or regarding other privileges in connection with these, shall not have the effect of placing American citizens or companies, or those of other nations or companies controlled by American citizens or nationals of other countries, at a disadvantage compared with the nationals or companies of the mandate nation, or companies controlled by nationals of the mandate nation or others.”

In brief, this Government desired to see applied the principles of the Open Door and of equality of commercial opportunity.

These principles, so far as the exploitation of petroleum resources in Iraq is concerned, are understood to have been provided for in the Agreement between the Iraq Government and the Iraq (then Turkish) Petroleum Company, signed at Baghdad on March 14, 1925.40 One of the clauses of this Agreement provides that the Iraq Government shall offer plots “for competition …between all responsible corporations, firms and individuals, without distinction of nationality”. It is the Department’s understanding that under this provision American companies or individuals are able to bid for petroleum concessions in certain areas of the Iraq field. Moreover, an American group of petroleum companies has already obtained an interest in portions of the Iraq field through its holdings in the Iraq Petroleum Company.

The Department has, however, never supported any particular American company or group of companies in Iraq in preference to or in exclusion of any other American companies. The interest of the Department is to maintain the Open Door and suitable opportunity for American enterprise in Iraq. It is left to the American companies and individuals who may be interested to take advantage of the opportunities that are offered.

You will of course bear in mind that you should not support any particular American group or company as against another. As among such companies the Department desires you to maintain a strictly impartial attitude. At the same time you should be diligent to report any discrimination, or attempted discrimination, against American interests, including, of course, those of the American group which holds shares in the Iraq Petroleum Company.

You may, of course, extend your good offices to any bona fide American company which seeks your assistance in entering the Iraq field, under the appropriate provisions of the Agreement between the Iraq Government and the Iraq Petroleum Company. Such assistance should generally be limited to placing the inquirer in [Page 311] touch with the appropriate authorities and to seeing that opportunity is afforded the American interest involved to obtain the consideration to which its proposals may be entitled.

I am [etc.]

For the Acting Secretary of State:
G. Howland Shaw
  1. None printed.
  2. See Foreign Relations, 1920, vol. ii, pp. 649 ff.; ibid., 1921, vol. ii, pp. 80 ff.
  3. Ibid., 1920, vol. ii, p. 651.
  4. Turkish Petroleum Company, Limited, Convention with the Government of ‘Iraq, made the 14th day of March, 1925 ([London,] Blundell, Taylor & Co. [1925]).