The Netherlands Minister (Loudon) to the Secretary of State

Sir: I have the honor to refer to the conversation I had the privilege of having with Your Excellency on February 8th [9th] concerning the Mexican Oil Dispute and the memorandum I left with you on that occasion.

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In the last paragraph of that memorandum the advisability was stressed that eventually consultation between our two Governments might take place regarding the terms of reference which might be adopted in case it were decided to submit the claims of all the oil companies to some form of international arbitration.

I now have received instructions to inform you that the Netherlands Government has been advised of the terms of reference which Mr. Farish in his letter of March 14th63 communicated to you on behalf of the American companies and that my Government regards these terms of reference as very suitable although possibly some improvements might still be made in the text.

Especially the provisions of the new article 10, according to which, pending the award of the tribunal, the expropriated properties or rights should be restored to the management of the respective oil companies, seem, in the opinion of the Netherlands Government, hardly acceptable to the Mexican Government.

Please accept [etc.]

A. Loudon
  1. Not printed. Mr. Farish suggested to the Department that in the contemplated arbitration of the petroleum question the United States, Great Britain, and the Netherlands jointly appear as plaintiffs. Acting as one party, the three countries would nominate two arbitrators, the Mexicans two, and the four would select a fifth. In the event of disagreement two members of the Permanent Court of Arbitration at The Hague would make the selection of the fifth arbitrator. (812.6363/6583)