File 2249/1915 Pt 4 ‘Oil: Mesopotamia & Persia. (General File) 1920–24’ [‎31r] (61/484)

13
For&ign Office, August 9, 1920.
Your Excellency,
I have the honour to refer to the notes dated the 12th May and 28th
ultimo which you were good enough to address to me, and in which your
Excellency^ referring to the mandates assigned to Great Britain, had
occasion to point out the general principles stated to be advocated by the
United States Government and agreed to by the Allied Powers which should
be adopted and applied to the mandates over former Turkish territory.
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
w'Wfi led to such conclusions. In view of this impression and of the necessity
for the adoption of careful measures which would ensure the practical ful
filment of the principles enunciated, you put forward certain proposals
which the United States Government would be 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 Govern
ment, 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 Mesonotamia was made subject to a
friendly arrangement with the Italian Governmenti 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 rig’hts.
5. I 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
whateve* 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. Yo 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 Baghdad which was started for purely military require
ments and is intended to deal with oil obtained from the Persian oilfields.
6. The difficulty and cost of conveying sum)lies of oil by river from
the base at Basra to military stations situated north of Baghdad 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 oil-well which had been partially developed by the
Turkish authorities previous to and during the war. The 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 private interests whatever are in any way involved.
T. 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 operations and facilities of every
kind at the ports for the landing of troops and stores. The construction of
railways in a country utterly destitute of any properly organised means of
communication has throughout the period of the war and since the cessation
of hostilities been of paramount importance from the military as well as
from the administrative point of view.