File 2249/1915 Pt 4 ‘Oil: Mesopotamia & Persia. (General File) 1920–24’ [‎65r] (129/484)

2. You at the same time drew my attention to the existing vested rights of
United States citizens in this territory and to the impression which had arisen in the
minds of the American people that the authorities of His Majesty’s Government in
the occupied territory of Mesopotamia had given advantages to British oil interests
which were not granted to American companies, and that His Majesty’s Government
were taking steps calculated eventually to bring the oil resources of Mesopotamia under
their exclusive control. Instances of activities in various directions were quoted which
had led to such conclusions. In view of this impression and of the necessity for the
adoption of careful measures which would ensure the practical fulfilment of the
principles enunciated, you put forward certain proposals which the United States
Government would he glad to see applied in the mandated territories, and explained
the necessity for giving practical consideration to certain concessions in those regions
granted by the Turkish Government, in some of which United States citizens claimed
vested rights.
3. The various points and suggestions which have formed the subject of your note
have had the careful consideration of His Majesty’s Government, and I desire to
furnish you in regard to them with the following observations : —
4. I would wish, at the outset, to refer to the last sentence of the first paragraph
of your note of the 12th May, to the effect that the assignment to Great Britain of the
mandate for Mesopotamia was made subject to a friendly arrangement with the Italian
Government regarding economic rights, and to state categorically that the assignment
of the mandate has been made and accepted subject to no friendly arrangement
whatever with any Government regarding economic rights.
■ 5. 1 will next deal with the alleged action of the authorities of His Majesty’s
Government in the occupied territories in giving facilities to British oil interests which,
it is contended, were denied to United States companies. The matter, as you will
recollect, has formed the subject of previous communications between us, and the hope
was entertained that whatever doubts had existed in regard to the attitude of His
Majesty’s Government in the matter had been satisfactorily dispelled. The authorita
tive statements to which you have alluded in the third paragraph of your note of the
12th May, and which would appear to be the basis for the reports that actual work has
been undertaken in Mesopotamia, are not founded on fact. Such reports would lead to
the assumption that the development of the oilfields has already been taken in. hand,
which is not the case. No pipe-lines or refineries for dealing with Mesopotamian oil
have been constructed. In fact, the only existing work of this nature is a small
refinery now in course of erection at Bagdad which was started for purely military
requirements and is intended to deal with oil obtained from the Persian oilfields
6 The difficulty and cost of conveying supplies of oil by river from the base at
Basra to military stations situated north of Bagdad and in the Mosul region have
compelled the military authorities in that region to consider the problem of securing
' sufficient supplies locally, and have led to the working of an od-well which had been
partially developed by the Turkish authorities previous to and during the war. Ihe
operations at this well have been conducted for purely military purposes under the
immediate supervision of the army authorities and at army expense, and no pnvate
interests whatever are in any way involved. n i m i n
7 In regard to the building of railways and dockyards, I need hardly dwell upon
the imperative necessity for providing, every possible means of transport during the
period of military ©Derations and facilities ol every kind at the ports for the landing o
troons and stores. 'The construction of railways m a country utterly destitute of any
properly organised means of communication has throughout the period of the war and
Lee the cessation of hostilities been of paramount importance from the military as well
as from the administrative point of view. . . „ , • ,
8 The suggestion that Great Britain during the period of military occupation of
the mandatory territories has been preparing for exclusive control of their oil resources
is equally devoid of foundation, and the claims of British commercial interests m those
regions, whatever they may be, are to-day no stronger, as they are no weaker, than
thev were at the outbreak of war. . , ,
y 9 I would like here to make a passing reference to the very mistaken impressions
which annear to be current in the United States m regard to the oil policy of His
MajestyviGovernment. The output of oil within the British Empire is only about
“i te/cent. of the world’s production, and if the production of Persia be me uded. in
vh-tue of certain oilfields in that country being owned by a British company the to al
amounts to about 4| per cent. Against this small percentage, the United States
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