File 3877/1912 Pt 2 ‘Turkey in Asia: oil concessions’ [‎7r] (22/308)

[This Docament is the Property of His Britannic Majesty's Government.]
"N TURKEY.
CONFIDENTIAL.
[11963]
No. 1.
[March 18.]
Section 1.
Memorandum by Mr. Ashley.—(Received at Foreign Office, March 18.)
Mesopotamian Oil.
IN accordance with Sir Hubert Llewellyn Smith’s instruction, I have this morning
had an interview with Dr. Bergmann, representing the Deutsche Bank. He was
accompanied by Herr von Kuhlmann.
Dr. Bergmann was acquainted with the outline of Sir Henry Babington-Smith’s
latest proposal. He said that, whilst the Deutsche Bank would naturally prefer a deal
with the British group, whereby each would have a 50 per cent, interest, they felt that
it w^ould be difficult for them to take such a course. In the first place, they are under
certain definite obligations in connection with the Turkish Petroleum Company, and
independent action by them might, and very probably would, give rise to litigation,
which they were anxious to avoid. In the second place, there are business relations
between the Deutsche Bank and the Anglo-Saxon Company in other fields, and the
Deutsche Bank for that reason desire that the settlement reached should be as amicable
as possible.
The Deutsche Bank therefore do not object to a settlement on the basis now
suggested by Sir Henry Babington-Smith, and Dr. Bergmann is of opinion that it offers
a solution which should be satisfactory to the d’Arcy group. I said that I was not in
a position to say what the decision of the d’Arcy group would be, but, speaking only
for myself, it seemed that there was a fair prospect of a settlement. It was suggested
that if the d’Arcy group were favourably inclined to Sir Henry Babington-Smith’s
proposal, a meeting of all the parties might be held, say, to-morrow, at which a record
of the arrangement could be drawn up and signed by the various parties. _ This
would give the British and German Governments an adequate basis for action at
Constantinople, and the formal details could be settled subsequently.
Herr Stauss, the oil company expert of the Deutsche Bank, would be available
early next week.
In view of the attitude of the Deutsche Bank and the apparently genuine nature
of the offer made by Sir Henry Babington-Smith, I venture to suggest that an effort
should be made to induce the d’Arcy group to accept the scheme. It appears to give
them all that they really want, or at least as much as they can reasonably expect—
50 per cent, of the control.
I suggest that, if they do acquiesce, a meeting of all the parties proposed above
should be held at the Board of Trade or at the Foreign Office, and that it should be
clearly understood that the purpose of the meeting would be to record a decision and
not to discuss any principles.
March 17, 1914.
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