874.6363 Petrol/7: Telegram

The Minister in Bulgaria ( Sterling ) to the Secretary of State

25. Department’s 20, September 7, 7 p.m. Council of Ministers has approved petroleum monopoly law now pending promulgation. It confers wide powers without specific stipulations and further regulations will be essential before exact situation can be understood. Such powers potentially confiscatory in application; in particular articles 4, 5 and 6 which in substance provide for (1) expropriation or lease of such real or movable property as the monopoly chooses; (2) movable [Page 107] property to be purchased at prices fixed by the monopoly with payment not necessarily in advance but over a period of 3 years; (3) recourse to courts against valuation but expropriation to be effected notwithstanding lawsuits.

No provision in law for [conversion?] in foreign currency.

Arnold very disturbed and communicating with his principals who will confer with the Department. He is of the opinion, however, that technical difficulties unforeseen by the Government will prevent immediate application of the law in its present form.

When project first rumored I saw the Prime Minister explaining large American interests which I hoped would not be prejudiced. Report by mail.