891.6363 Standard Oil/328
Memorandum by the Chief of the Division of Near Eastern A fairs, Department of State (Dulles)
When Mr. Wellman2 called on me on January 23rd to take up the Mesopotamian oil question he read me, asking for any comments, correspondence between the Standard Oil Company of New Jersey and a person in the far west who had written to inquire of the Company whether it was true that they had joined with a British Company to exclude another American oil company from Persia. Mr. Wellman said that this was rather a serious accusation and that as they found out that the person making the inquiry was a substantial citizen they thought his letter should be answered.
[Page 540]Mr. Wellman then read the reply which the Company had already sent. This reply gave a somewhat full history of the negotiations of the Standard Oil Company of New Jersey with the Persian Government and the Anglo-Persian Oil Company with regard to North Persia, and explained the Company’s cooperation with British interests on the ground of a pre-existing concession granted to Koshtaria and acquired from Koshtaria by the Anglo-Persian Company. Reference was also made to the conferences which the Standard Oil Company’s representatives had had with the Department in December 1921, at which time, according to Mr. Wellman’s letter, the Department had indicated that it favored a policy of cooperation rather than of conflict in Persia. As I recall (Mr. Wellman did not leave a copy), the letter also indicated that the Standard Oil Company proposed to defend their share of the Koshtaria claim acquired from the Anglo-Persian Oil Company.
After reading me this letter Mr. Wellman said that the Standard Oil Company had felt that it was desirable to make this frank statement, that they naturally planned to protect their interests. Mr. Wellman further indicated that the Standard Oil Company contemplated making the letter public. I told Mr. Wellman that I could not comment in any way upon the letter. It expressed the views of the Standard Oil Company not the views of the Department. I realized that the Company had a right to protect its interests in the way which seemed best to it.
(The letter which Mr. Wellman read was of a character to precipitate the controversy between the Standard Oil and the Sinclair with regard to their rights and interests in Persia which will be inevitable in case the Sinclair concession is formally ratified. I gathered the impression from Mr. Wellman that the Standard Oil Company expected the Department to maintain a position of neutrality as between the 50% Standard Oil Company interest in the Koshtaria concession and the prospective 100% Sinclair Oil Company interest in the concession recently signed by the Persian Ministry but not ratified by the Parliament. Mr. Wellman apparently felt that the Department, in case issue should be joined on this point, would favor the settlement of the controversy by an impartial arbitration which would determine the respective merits of the Koshtaria and the possible Sinclair concession. I said that the Department, as far as I knew, had not definitely decided the course it would take in case the contingency to which he referred should arise. There were two possibilities, one that the Department might itself examine the records and claims of the rival American concessionnaires and decide which had a valid concession and therefore the right to support. On the other hand the Department might feel that the question was one for arbitration outside the Department.)
[Page 541]Mr. Wellman as lie was leaving said that Mr. Bedford3 had recently expressed the view to him that the Standard Oil Company, by following the line of policy which the Department had favored in Russia and in Persia, had apparently been placed in a disadvantageous position vis à vis other Companies which were willing to go ahead irrespective of the Department’s general policy. He then referred to the fact that the Standard Oil Company had refused Russian offers similar to those which had been taken up by the Sinclair. Mr. Well-man added that however this might be the Standard had no idea of changing the policy which it was following, namely, of taking into account what they considered to be the policy of this Government.