890G.6363/402

The Minister Resident in Iraq ( Wilson ) to the Secretary of State

No. 234

Sir: I have the honor to acknowledge the receipt of the Department’s telegram No. 54 of March 11, 9 p.m. and to refer to my telegram No. 109 dated March 16 [15], 6 p.m. which was sent in reply thereto. Both of these telegrams refer to the oil concession of the Basra Petroleum Company and to my conversations with the Iraqi Prime Minister, Nuri as-Said, on the subject.

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As soon as it was possible after the receipt of the Department’s telegram above referred to, I arranged for a meeting with the Prime Minister and on Sunday morning, March 14th, at 12:45 I went to his office for the purpose of giving further emphasis to those points which the Department seems to fear had not been placed before Nuri. I am enclosing a memorandum of my conversation with the Prime Minister37 from which it will be seen that, although in agreement with the American point of view in some important respects, Nuri Pasha is nonetheless determined to hold to his own interpretation of the claim of force majeure. As I have stated in the memorandum, I feel the difficulty here is not that Nuri is holding with stubbornness to his own interpretation and refuses to see the implied inconsistency of his action in order at some future date to take advantage of this point and invalidate the concession; I am inclined to think that it is more a difficulty of language which prevents Nuri from capturing the underlying principles of the American point of view—notwithstanding his highly adequate command of the English language. And yet, it is quite possible that I am mistaken in this; his refusal may be based upon political grounds which prevent him from giving the slightest appearance of having withdrawn from a stand he has so stubbornly held to after having in the first instance initiated an arbritration which he did not in fact want to enter upon.

When my other despatches to which my telegram No. 109 above referred to have arrived I believe a clearer understanding of what has transpired will result. On the other hand, I am myself uncertain as to the Department’s full meaning of the last sentence in its No. 54 of March 11, 9 p.m.: “The Department wishes you to continue to press this matter to a successful conclusion.” As I see it, the only successful conclusion I could possibly achieve, now that a negotiator with powers to arbitrate has been sent out by the combined oil groups with full authorization and recognition as well, would be to place before the Prime Minister the American point of view which has been so ably defined by the Department in its various telegrams on this subject. I have not failed in this, but, lacking the power to negotiate, (which arrangement would presumably have to be recognized by the Iraq Government as well as the oil interests,) I do not see the possibility of my changing the course of the negotiations which are now under way and in all likelihood at a very delicate stage.

The contents of the despatches I have sent to the Department will acquaint them with the fact that I have not been hesitant in discussing [Page 653] this matter with those concerned whenever I felt such discussions would bear weight. Aside from the Prime Minister I have talked with Abdul Illah Hafidh, the Minister of Foreign Affairs who was appointed arbitrator by the Iraq Government vis-à-vis Skliros, and with Skliros as well. Another handicap I have had to face which adds to the uncertainty of my position is the fact that my talks in the interests of the American Company are not entirely welcomed by any of those concerned. Despite my explanations that the basis upon which is founded my Government’s support of the Near East Development Company is their contention that the Iraq Petroleum Company is itself in the nature of an international partnership, both Nuri and Abdul Illah Hafidh have not failed mildly to express regret that my Government “took such an interest” (interfered with was the unavoidable intimation) in a question which in their opinion is one between the Iraq Petroleum Company and the Iraq Government. Skliros, although not discourteous, has been nonetheless emphatic in this view, and it is of some significance that the British Embassy appears not to be entering into any of the present negotiations at all. The Ambassador told me Sunday night that he had not seen Skliros or talked with him since the preceding Tuesday.

Notwithstanding all of this I have not hesitated to hold firmly to the American point of view as outlined by the Department. Skliros has been particularly quick to invite my attention to the fact that although certain American interests (the Near East Development Company) feel concerned on certain points, they nonetheless speak as a minority and as such have sought the “big stick” refuge of an appeal to Government. He holds that American interests other than the Near East Development Company have a somewhat larger claim for recognition of the point of view held by the majority which have agreed on sending him (Skliros) with full powers to settle, to the best advantage as he sees it, an irritating question which if allowed to continue its present course will present greater difficulty of settlement and a larger expenditure of moneys as time elapses.

Respectfully yours,

T. M. Wilson
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