The Consul at Aden (Southard) to the Secretary of State

No. 409

Sir: I have the honor to refer to this Consulate’s despatch No. 405 of July 29, 1920,6 and preceding despatches, on the above subject, and to submit the following additional information which was obtained during a visit just made by the undersigned to Abyssinia under authority of the Department’s telegraphic instruction of July 3, 1:00 P.M., 1920.

The information given in this Consulate’s despatches Nos. 391 and 400, of June 21 and July 19, 1920,7 respectively, relative to the H. M. Baghdassarian concession, appears to be generally correct after investigation on the ground. It has further been learned, however, that H. M. Baghdassarian, who is an Armenian resident in Abyssinia, obtained his mineral concession for the whole of Harrar province at a time about five years ago when the Prime Minister at Adis Abeba was a prominent Abyssinian chief known as Haile Giorgis. Lij Yasu was then the heir to the throne and nominal ruler of the country. Haile Giorgis issued the Baghdassarian concession and it appears to bear only his seal and not that of Lij Yasu. Upon the deposition of Lij Yasu in 1916 Haile Giorgis was thrown into chains and is to this day a political prisoner at Harrar, the capital of Harrar province.

When Ras Tafari became Prince Regent and actual ruler of the country he repudiated many of the acts of the ex-Prime Minister [Page 249] Haile Giorgis. Other acts, such as certain concessions, were permitted to stand for the time being. Baghdassarian knew that his concession might be considered invalid as it lacked the seal of the then actual ruler of the country. The Armenian has a certain amount of influence, however, with Has Tafari and his concession was permitted to stand until the current year when Tafari found that the existence of this old concession placed him in a difficult position as he was being very strongly pressed to issue to the Abyssinian Corporation, Limited, a concession covering Harrar province. The Corporation had first negotiated with Baghdassarian, as has been referred to in previous despatches, but no agreement had been reached although it has since been learned that Has Tafari informed Baghdassarian that it was his desire that an arrangement be made with the Corporation.

Although Baghdassarian knew that the validity of his concession was questionable and that its continued existence depended more upon the goodwill of Kas Tafari than upon any legal right he continued to attempt to sell all or a part of it. He also knew that the Ras, as the result of strong pressure brought to bear by the British Legation at Adis Abeba, would approve and legalize any arrangement made with the Abyssinian Corporation in connection with his presumably invalid concession. He was, however, unable to make a satisfactory agreement with the resident manager of the Corporation and decided to take his concession to London. Ras Tafari knew of this and secured from Baghdassarian a promise that he would reopen negotiations with the London office of the Corporation … So far as can be judged from conflicting stories of what happened in London Baghdassarian did not approach the Abyssinian Corporation representatives there but, with the connivance of one H. H. Topakyan, who is referred to in this Consulate’s despatch No. 392 of June 22, 1920,8 impressed the Anglo-American Oil Company to the extent that that company entered into an agreement with him for the exploitation of his Harrar concession. Baghdassarian must have known that Ras Tafari would be displeased that he had not carried out the original understanding relative to negotiating first with the London office of the Corporation, and would probably repudiate the concession as invalid on the ground that it had only the seal of the ex-Prime Minister Haile Giorgis. …

The British Legation and the Corporation officials evidently had advance notice of what they considered Baghdassarian’s intention … and in April of the current year … [obtained] a new concession in their favor which would invalidate the original Baghdassarian concession. The Ras … issued a concession to the Corporation [Page 250] for the eastern half of Harrar province in consideration of a payment of an amount stated to be 20,000 pounds sterling by the Corporation. … Baghdassarian … did not notify the Anglo-American Company in London, …

However, the agreement was made and the Anglo-American Oil Company despatched, at considerable expense, an expedition to exploit the alleged Abyssinian oil fields. The arrival of this expedition at Aden and its journey to Abyssinia have been discussed in this Consulate’s previous despatches. Upon arrival of the expedition in Abyssinia it was found that the Baghdassarian concession had been invalidated and that the Abyssinian Corporation, Limited, held a valid and legal concession for the most desirable half of the territory covered by the original Baghdassarian concession. The Anglo-American representatives were inclined at once to give up their project, but were encouraged by Baghdassarian to wait a while until he could arrange to obtain a new concession. He appeared to be making no headway in this matter and the Anglo-American representatives attempted to reach the Ras and negotiate directly for a concession. This they were unable to do owing to their lack of experience of how things are done in Abyssinia, which circumstance enabled Baghdassarian to prevent them seeing the Ras on business.

Such was the situation at the time the undersigned arrived in Adis Abeba the first part of August; and being appealed to by the Anglo-American representatives steps were taken to protect such interests as might seem to be their right. The undersigned applied for and obtained an informal audience with Ras Tafari for the purpose of discussing this and other matters of possible interest to the Department. The Ras stated definitely that he considered the original Baghdassarian concession invalid because it had not been issued in legal form. To this it did not seem discreet to offer any argument, but it was suggested to the Ras that an American company in good faith and at considerable expense had sent out an expedition to exploit the oil rights under the Baghdassarian concession, and that if the expedition had to return without having accomplished anything there would likely result an impression unfavorable to Abyssinia, and that his representations made to the undersigned on former occasions that he very much desired American enterprise in his country would appear to lack sincerity.

Ras Tafari then said that he would make it possible for the American company to work in Harrar province; that although he had already sold to the Abyssinian Corporation, Limited, a concession for the eastern half of Harrar province he would at once issue to Baghdassarian a new concession for the other half of the province under which the Anglo-American Oil Company could proceed to [Page 251] work as originally agreed in London with Baghdassarian. The undersigned suggested that Baghdassarian apparently had not been honest with the Anglo-American Oil Company in the first instance and might refuse to deal with them under the new concession. He replied that if he issued the concession at all it should be to Baghdassarian as he felt that the latter was entitled to some recompense for the cancellation of his original, though invalid, concession for the whole of the province.… It was then suggested to Ras Tafari that the new concession issued to Baghdassarian should include an article specifying that the Anglo-American Oil Company should have the privilege of exploiting the oil rights under the agreement made in London with reference to the original and apparently invalid concession. After some argument the Ras agreed to this. In two days, a record time for Abyssinia, the issuance of the new concession was secured and it contains as “Article 19” the proviso that the oil rights shall be worked by the Anglo-American Oil Company under the agreement previously made with the company by H. M. Baghdassarian in London.

In insisting upon and obtaining this protection for the Anglo-American Oil Company the undersigned was careful, as instructed by the Department, to make it plain that the company had no official status but was merely receiving the official protection of its legal commercial rights to which it and any other American company operating abroad was entitled.

The concession issued to the Abyssinian Corporation, Limited, is for the “eastern half” of Harrar province, or for that part adjoining the British Somaliland frontier. The new Baghdassarian concession is for the western half of the province. The division had not been made and as it promised to be a delicate and difficult matter the Ras … informed the undersigned that the Baghdassarian-Anglo-American group would have to get together with the Corporation and make the division. If they could not agree he promised to arbitrate. This latter contingency was undesired as it would indefinitely delay matters. The Anglo-American representatives then met the Abyssinian Corporation representatives to discuss division and could not agree, as was to be expected. At the request of the Anglo-American representatives the writer then informally took up the matter with the British Chargé d’Affaires at Adis Abeba, … It was suggested to this gentleman that the American group very much desired an amicable settlement and working arrangement with the Corporation and he was asked to use his influence with the representatives of the latter. He saw the point that if the Anglo-American group developed the Baghdassarian half of the concession the half possessed by the Corporation would at once become much more [Page 252] valuable without the latter having incurred any expense for development work. Because of this and various other obvious reasons he saw that it was to British interest to use his influence towards an amicable settlement. He did so and an agreement as to the division of the province was arrived at and is now in the hands of Ras Tafari for approval. In the meantime the Anglo-American representatives are authorized to start prospecting work.

. . . . . . . . . . . . . .

The territory in which the Anglo-American Oil Company will prospect for oil under the new Baghdassarian concession and the agreement with the Abyssinian Corporation, Limited, is the northern part of Harrar province bounded approximately as follows: on the north by the 11th degree of north latitude; on the south by the 9th degree of north latitude; on the east by the 43rd degree of east longitude; and on the west by the 40th degree of east longitude. The eastern half of this approximate district is included in the Abyssinian Corporation concession for all minerals and the western half is included in the new Baghdassarian concession which also is for all minerals. The privilege gained by the Anglo-American Company to prospect for oil only in that part of the district included within the Abyssinian Corporation concession is the result of compromise by which the Corporation is in return given oil rights in the southern half of the Baghdassarian concession. The Anglo-American territory is considered much the more promising for oil.

. . . . . . . . . . . . . .

I have [etc.]

Addison E. Southard
  1. Not printed.
  2. Neither printed.
  3. Not printed.