371.115 St 2/129

The Minister in Rumania (Owsley) to the Acting Secretary of State

No. 50

Sir: I have the honor to refer to the Department’s instruction No. 18 of November 10, 1933, and to inform the Department that on the several [Page 685] dates hereinafter mentioned the Legation has received communications from Mr. J. P. Hughes, General Manager of the Româno Americanǎ, which is an American institution and, the Legation is informed, controlled by the Standard Oil Company of New Jersey, asking the cooperation of the Legation in protesting on behalf of this Company against the suspension of payment of coupons on the war damage bonds held by the American company under a settlement between the Rumanian Government dated August 21, 1928, in consideration of damages inflicted to the Româno Americanǎ properties by order of the Rumanian Government in 1916.

I have the honor to enclose a copy of the communication dated Bucharest, December 6, 1928 [1933], addressed to Mr. Titulescu, Minister for Foreign Affairs, presenting the Legation’s point of view in this matter. I would particularly ask the attention of the Department to the wording of my communication to the Foreign Ministry in that it does not undertake to declare the war indemnity bonds held by the Româno Americanǎ to have preference over any other outstanding obligations of the Rumanian Government. It is my intention to direct the attention of the Rumanian authorities to their failure to pay to the Româno Americanǎ the amount of money now apparently due under the provisions of certain obligations held by the Româno Americanǎ and executed by the Rumanian Government, and the question of priority of outstanding obligations does not enter into it.

Certainly the late Minister of Finance, Mr. Madgearu, or some properly accredited official of the Finance Ministry should have consulted with a representative of the Româno Americanǎ, as the owner and holder of Rumanian obligations, before an arbitrary decision of the Rumanian Government was published in the official Monitorul Oficial (No. 278) as was done under the date of November 30, 1933.

The position of the Româno Americanǎ as presented to the Legation clearly appears in a letter dated November 28, 1933, addressed to me, which has attached to it and made a part of the letter a communication under date of November 15, 1933 to the Minister for Foreign Affairs, Mr. Titulescu, over the signature of one H. E. Medlicott. As I understand, Mr. Medlicott is the attorney and the personal representative of the Româno Americanǎ out of the London office. Copies are herewith enclosed for the further information of the Department;39 also a second letter addressed to me under date of December 4, 1933, and its enclosure.39

Bearing in mind the instructions of the Department hereinbefore referred to, I have assured Mr. Hughes, the representative of the Româno [Page 686] Americanǎ here in Bucharest, that I will use my best energies to assist in the proper presentation of the position of his company in this case, which presents several delicate sidelights.

Respectfully yours,


The American Minister (Owsley) to the Rumanian Minister for Foreign Affairs (Titulescu)

No. 13

Excellency: By recent communication the Româno Americanǎ, a subsidiary of the Standard Oil Company of New Jersey, has brought to the attention of the Legation that the Rumanian Government by decree published in the Monitorul Oficial No. 278 of the date of November 30, 1933, announces the decision of the Minister of Finance relative to the payment of the coupons on the bonds issued in compensation for damages to the petroleum industry, and gives notice of a suspension of a part of the oil annuities payable under a settlement between the Rumanian Government and the Româno Americanǎ, dated October 1, 1928, in consideration of damages inflicted to the Româno Americanǎ properties by order of the Rumanian Government in 1916.

I am informed that this decision was taken without prior consultation with the American concern, which feels that it is entitled to a hearing in the matter. The bonds in question were issued pursuant to a bilateral contract, and the minimum requirements of accepted commercial and financial practice would demand the consent of both parties thereto if the contract is to be altered. Only by the freest discussion of the question of indebtedness and the capacity to pay, passing from the creditor to the debtor, can we arrive at the high plane of settlement which doubtless the Rumanian Government desires to sustain in the settlement of its financial obligations to all concerned.

In bringing this matter to Your Excellency’s attention, I entertain the hope that the Royal Rumanian Government will find it expedient to recall the arbitrary decision of the Minister of Finance, and that an equitable settlement of the matter will be reached in such a manner as to be acceptable to the Româno Americanǎ.40

I avail myself [etc.]

Alvin M. Owsley
  1. Not printed.
  2. Not printed.
  3. No further correspondence on the case is found in Department files.