File 2249/1915 Pt 4 ‘Oil: Mesopotamia & Persia. (General File) 1920–24’ [‎32r] (63/484)

noiie the less of the opinion that the terms of the mandates can only pro*-
perl\ be discussed at the Council of the League of Natibns by the signatories
of the Covenant,
16. In the matter of concessions granted in the mandated territories
by the Turkish Government, His Majesty’s Government fully agree with
the views of the United States Government that due consideration must
be given to all rights legally acquired before the outbreak of hostilities.
Provision for the consideration and recognition under certain conditions of
concessions situated in territories detached from the Turkish Empire has,
moreover, as you no doubt know, been made in the treaty of peace with
Turkey. His Majesty’s Government are aware that certain rights were
acquired in Palestine before the war by American citizens, while British
interests, such as the Turkish Petroleum Company and other groups, claim
similar rights either in Mesopotamia or in Palestine. These claims will
naturally have to be given practical consideration and receive equitable
treatment consistent with the interests of the mandated territories.
11- As part of the administrative arrangements under the treaty of
peace with Turkey and the mandate, the oil deposits in Mesopotamia "will
be secured to the future Arab State, but it is far from the intention of the
mandatory Power to establish on its own behalf any kind of monopoly.
18. In view of long-standing interests which the French Government
possessed in the Mosul district, arrangements -were made whereby the
French Government should, on renouncing those interests, be assured of a
certain participation in the Mesopotamian oil production. It was accord
ingly decided that, in the event of the Mesopotamian oilfields being
developed by the State, France should be entitled to purchase 25 per cent,
of the oil production at ordinary market rates, or, in the alternative of the
oilfields being developed by private enterprise, that French participation
should not be less than 25 per cent, in the share-holdings, while provision
was made that the Mesopotamian Administration should likewise have a
certain, share.
19. In consideration for such participation, the French Government
agreed to permit the laying of a pipeline from the Mesopotamian oilfields
through Syria, besides providing for“Hhoii* facilities. These arrangements,
including others for mutual co-operation in other countries, were embodied
in an agreement which has been published. The practical outcome of the
arrangement, so far as’ Mesopotamia lis concerned, is that, while France
secures a share in the output of oil at ordinary market rates, the Meso
potamian State is afforded, in return, facilities for placing the production
of the oilfields within easy reach of the world’s markets. The agreement
aims at no monopoly, it does not exclude other interests, and gives no
exclusive right to the mandatory Power, wh ile the Mesopotamian State is
free to develop the oilfields in any way it may judge advisable, consistent
with the interests of the country.
20. I feel bound to observe that, even if any special privileges were
assigned to France undei; this agreement, such a proceeding would be con
sistent with the interpretation consistently placed by the United States Gov-
ernment on most-favoured-nation clauses in treaties, namely, that special
privileges conceded to particular countries in return for specific concessions
cannot, in virtue of such a clause, be claimed by other countries not offering
such concessions. The United States Government have indeed recently
taken a further step in the case of the “Jones” Act, and have taken powers
actually to withdraw treatment secured by treaties which in some cases
contain no provision for denunciation.
21. As regards the alleged action of the AdministratiJbn of
Tanganyika territory referred to in the penultimate paragraph of your note
of the 28th ultimo, I should be obliged if you would furnish me with the
names of any persons who have been refused privileges granted to British
subjects and the rates of their applications.
I have, &c.
CUBZON OF KEDLESTON.
CPSI...1325...1946...100...7-12-21.