Foreign Relations of the United States Diplomatic Papers, 1932, The British Commonwealth, Europe, Near East and Africa, Volume II

890b.6363 Gulf Oil Corporation/16

The Ambassador in Great Britain (Dawes) to the Secretary of State

No. 2482

London, December 29, 1931.
[Received January 6, 1932.]

Sir: I have the honor to refer to the Department’s telegraphic instruction No. 336, December 3, 5 p.m., regarding the Koweit oil concession, and, as of record for the Department in its discussions with any interested American company, to state, as set forth in the Embassy’s telegram No. 453, December 4, 5 p.m.,² that on that date this matter was discussed by the Chargé d’Affaires with the Assistant Secretary of State. On December 14, upon his return from Paris, the Ambassador discussed this matter with Sir John Simon, and supplemented this conversation by an informal note, dated December 22, to the Foreign Secretary, a copy of which is enclosed.

Shortly after the Ambassador’s interview with Sir John Simon, the Counselor of the Embassy had occasion to see Sir Lancelot Oliphant and again referred to the matter, and on December 22 received a note of reply to his representations, which stated:

“In the course of our conversation on the 4th December, you raised the question of the application of the Eastern and General Syndicate to be granted a concession in respect of exploration for oil in Koweit.

“I find on enquiry that some doubt exists as to the correctness of the interpretation placed by the Syndicate upon the letter addressed to their representative, Major Holmes, by the Sheikh of Koweit on the 2nd July, regarding the inclusion in such a concession, if it were granted, of a clause stipulating that the concession should not be transferred to a non-British company.

“In these circumstances it has been necessary to obtain a report from the Political Resident in the Persian Gulf and the Political Agent at Koweit before any further communication can be made to the Syndicate. This report has only just been received, and a further communication will be sent to you as soon as it has been considered by the various Departments concerned.”

This was followed shortly by an acknowledgment from Sir Lancelot Oliphant, in the absence of Sir John Simon, to the Ambassador’s personal letter of December 22, referred to above.

On December 28, in the course of a conversation with Sir John Simon, the Ambassador took occasion again to raise the question, and left with him a memorandum which had been prepared by Major Harry G. Davis, the London representative of the American company, setting forth certain facts for consideration. A copy of this memorandum is attached hereto.²

On December 29 Mr. Atherton saw Sir Lancelot Oliphant again and in the course of conversation said that he hoped the Foreign Office would satisfy itself that while this matter of the Koweit concession was under discussion between the Embassy and the Foreign Office no facilities for survey and exploration were being sought through the good offices of British officials for any other British oil company. Sir Lancelot Oliphant promised to raise this point at once with the Colonial Office and to indicate his feeling of the correctness of this attitude. He stated further that the text of a note of the Sheikh of Koweit regarding the non-nationality clause which had been referred to in his note quoted in this despatch was under consideration at the moment by the Colonial Office and that he would again inquire as to the likelihood of an early and fuller reply.

The texts of all notes to and from the Foreign Office in this connection have been shown to Major Davis, the London representative of the American company, and reports of conversations with the Foreign Office have been discussed with him, so that he has been kept fully informed of the Embassy’s action in every detail, and he has, according to his reports here, fully informed his company in New York from day to day of the progress of the negotiations.

Respectfully yours,

(For the Ambassador)

Ray Atherton

Counselor of Embassy

[Enclosure]

The American Ambassador (Dawes) to the British Secretary of State for Foreign Affairs (Simon)

London, December 22, 1931.

My Dear Sir John: In furtherance of my remarks to you the other day regarding the Koweit oil concession, I venture to set forth below the pertinent section of the United States Mining Lease Act of February 25, 1920, under which you will notice that British subjects receive the same treatment as American citizens:

“(Public–No. 146–66th Congress)

“(S. 2775)

“An Act To promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain.

“Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That deposits of coal, phosphate, sodium, oil, oil shale, or gas, and lands containing such deposits owned by the United States, including those in national forests, but excluding lands acquired under the Act known as the Appalachian Forest Act, approved March 1, 1911 (Thirty-sixth Statutes, page 961), and those in national parks, and in lands withdrawn or reserved for military or naval uses or purposes, except as hereinafter provided, shall be subject to disposition in the form and manner provided by this Act to citizens of the United States, or to any association of such persons, or to any corporation organized under the laws of the United States, or of any State or Territory thereof, and in the case of coal, oil, oil shale, or gas, to municipalities: Provided, That the United States reserves the right to extract helium from all gas produced from lands permitted, leased, or otherwise granted under the provisions of this Act, under such rules and regulations as shall be prescribed by the Secretary of the Interior: Provided further, That in the extraction of helium from gas produced from such lands, it shall be so extracted as to cause no substantial delay in the delivery of gas produced from the well to the purchaser thereof: And provided further, That citizens of another country, the laws, customs, or regulations of which, deny similar or like privileges to citizens or corporations of this country, shall not by stock ownership, stock holding, or stock control, own any interest in any lease acquired under the provisions of this Act.”

In discussing this with the representative of the interested company here, he informed me that the syndicate concerned has already advised the Colonial Office that the same nationality conditions as incorporated by the Colonial Office in the case of the Bahrein oil concession, which the Embassy discussed with the Foreign Office in 1929 (reference: Foreign Office note No. E 2521/281/91 of May 29, 1929⁴) are acceptable in the case of the Koweit concession. I understand the Bahrein concession was assigned to the Bahrein Petroleum Company, the Canadian subsidiary of the Standard Oil Company of California. In this connection a statement to me by the Syndicate representative may be of interest to you:

“The agreement entered into between the Eastern and General Syndicate, Limited, with the Eastern Gulf Oil Company stipulates that the nominee of the Eastern Gulf Oil Company will be a Canadian or English Corporation, at the election of the Eastern Gulf Oil Company. A copy of this agreement has been in the possession of the Colonial Office (in its consideration of the Koweit oil concession) since December 28th, 1928, the same having been furnished to the Colonial Office by the Eastern and General Syndicate, Limited.”

As stated to you the other day, the discussions have been so long delayed that I should be most appreciative of an early word of reply.

Yours sincerely,

Charles G. Dawes

2. Not printed.
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4. See telegram No. 135, May 30, 1929, from the Chargé in Great Britain, Foreign Relations, 1929, vol. iii, p. 81.