851.6333/157: Telegram
The Secretary of State to the Chargé in France (Marriner)
287. Your 428, September 26. The American oil interests have been to the Department to present their position and to request that representations be made to the French Government.
In 1919, when a monopoly was first proposed following the war, you will find from your files that the Embassy made representations to the French Government and that the French Government replied to the effect that the question of establishing an oil monopoly was one of internal policy in which foreign governments may only find grounds to intervene if the monopoly jeopardizes any rights acquired by their nationals or if the monopoly deliberately favors exporters of certain nationalities to the prejudice of others. (See Embassy’s telegram 1409, September 19, 1919.)17 The American companies maintain that through their license authorizations and by reason of the obligations which they have incurred thereunder, they have acquired rights for the period of the licenses in question, namely, 20 years. Upon the basis of these licenses they have gone into France with their capital and established import facilities and refineries at a cost of approximately $50,000,000. If an import monopoly and/or a refining monopoly were established by the French Government the rights acquired under these licenses would be jeopardized. Furthermore, in the light of your telegram it would seem that the French have in mind the possibility of obtaining a large percentage of their petroleum needs from Russia. Thus both of the points which were brought out by the French in 1919 are involved in this case. The possibility of deliberately favöring imports of Russian oil is very important to the American interests because they have so developed crude oil production in this country as to meet the requirements of their French refineries. The French should not, therefore, especially in view of the position which they took in 1919, consider that representations by you will be in the nature of an interference with internal policy. I wish, therefore, that you will take this up orally but nevertheless as under instructions from your Government at your earliest convenience with the appropriate French authorities, making clear to them that this Government views with concern current reports indicating the possibility of establishing an oil monopoly, the effect of which would doubtless be seriously to jeopardize existing American licenses and investments. I suggest for your consideration an approach along the same lines as those taken by the British. I leave to your discretion whether you should add to your representations a statement to the effect that the [Page 174] American Government will, in the event that a monopoly is established, expect full indemnification for injuries which may be sustained by American interests. Please keep in touch with the British Embassy and keep me fully and telegraphically informed with regard to developments in this matter.
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