867.77/348: Telegram

The Commissioner at Berlin ( Dresel ) to the Secretary of State

[Paraphrase]

1348. The following is from Coffin for the information of Chandler:

The Deutsche Bank concurs in the desire to have connections with Sinclair, and to that end will make every possible concession. Definite arrangements must be concluded at once, however, as delay might endanger seriously its own interests. Under present conditions, Sinclair could not make inspections or surveys, and Sinclair must realize the great value that the German, French, and British interests attach to the oil fields. The bank is compelled to consider an alternative of partnership with American interests and to [safeguard] its own financial interests by selling to the British and the French. In order to facilitate matters the following proposal is made: the formation of a syndicate to purchase the control of the Orient Bank, Sinclair to receive 25 percent, including an option upon an additional 25 percent until the end of June 1921 with interest at 6 percent. Sinclair will by this arrangement be engaged for one and one-half million only. An additional one and one-half million would be underwritten by Austrian friends and the Deutsche Bank would underwrite the remaining 50 percent. Sinclair would have the leadership in this combination in spite of their minority holding at the beginning. Meissner should be informed.

The following is for the confidential information of Mr. Chandler: An extension of the option has been secured until December [Page 773] for consideration, and I am telegraphing Sinclair to go to Berlin at once upon his arrival. In my opinion no deal can be made which will leave option open for final refusal as you suggest but if this difficulty can be met, I am sure that an arrangement can be concluded that will be satisfactory. The presence of Mr. Sinclair in Berlin will facilitate negotiations greatly.

Dresel