856d.6363/545
The Minister in the Netherlands (Tobin) to the Secretary of
State
The
Hague, July 10,
1928.
[Received July 23.]
No. 1553
Sir: Referring to my telegram No. 34, of July
7, 1928, 3 p.m.,17 I
have the honor to transmit herewith copies and translations of three
communications exchanged to-day between the Legation and the Foreign
Office with respect to the establishment of reciprocal treatment in
petroleum matters between the United States and the Netherlands.
Memorandum No. 21432 (Enclosure No. 1) contains the assurances requested
in the Legation’s Memorandum of March 5, 1928. The Legation’s
acknowledgment is attached thereto (Enclosure No. 2). The second
Memorandum, No. 21433 (Enclosure No. 3), to which no acknowledgment was
made, records certain views of the Dutch Government with regard to
possible legal and other difficulties which might arise in connection
with the exploitation of concessions in the United States public
lands.
For the sake of the record and as a matter of convenience I am likewise
enclosing, in addition to copies of the final memoranda, copies of the
first two drafts (Enclosures Nos. 4 and 5)17 which were tentatively submitted to the
Legation for consideration. A comparative study of these various
documents will show that throughout the negotiations the Legation has
been actuated by a desire first to obtain definite and satisfactory
assurances as to Dutch future policy with respect to petroleum requested
in the Legation’s Memorandum of the 5th of March. The second object in
mind was to persuade the Foreign Office to omit
[Page 399]
any reference in the discussions or correspondence
to the ambiguous, extraneous and what the Legation considers as
theoretical arguments which the Dutch Foreign Office advances to
illustrate an alleged discrepancy in the security offered by the legal
systems of the two countries. While, for reasons mentioned below, it has
not been possible to bring about the elimination of all references to
this subject, it has been possible to have these considerations included
in a separate minute and in a form so modified as to make them
comparatively innocuous. It is evident from the elliptical phraseology
employed that the Foreign Office is itself none too sure of the
arguments advanced. Admittedly, they have been introduced into the
discussion because of a promise to do so made to the Royal Dutch, which
sees in them a basis for an argument in the future should any difficulty
arise on this score in connection with the operations of any of its
subsidiaries in our public lands.
I have [etc.]
[Enclosure 1—Translation18]
The Netherlands Ministry for
Foreign Affairs to the American
Legation
No. 21432
Memorandum
The Ministry of Foreign Affairs has noted with great interest the
viewpoint of the Government of the United States concerning the
exploitation of petroleum fields in the United States and in the
Netherlands Indies as set forth in the American Legation’s
memorandum of March 5, 1928.
In response to the desire expressed by the American Legation to
receive assurances on three points regarding the Netherlands policy
with respect to the exploitation of petroleum fields in the
Netherlands Indies, the Ministry of Foreign Affairs has the honor to
inform the American Legation as follows:
- 1.
- The Netherlands Indies mining law (Indische mi jnwet) makes no objection to the
granting of rights for the exploitation of petroleum fields
by United States citizens or by companies with American
capital, provided that such citizens or such companies
comply with the stipulations of article 4 of that
law.
- 2.
- The law of February 9, 1928 (S. 23), authorizes the
Minister of Colonies to sign contracts with a company in
which American capital is heavily interested, which will
make it possible for that company to exploit important
petroleum terrains in the Netherlands Indies. The Minister
of Colonies is prepared to sign these contracts. It is
understood
[Page 400]
that,
as soon as the signature of these contracts shall have been
notified to the Legation of the United States, the latter
will transmit to the Ministry a communication to the effect
that the Government of the United States recognizes the
Netherlands as a reciprocating country in the sense of the
mineral leasing act of February 25, 1920.
- 3.
- Her Majesty’s Government has no intention of abandoning
the open-door policy in so far as the granting of rights for
the exploitation of oil fields in the Netherlands Indies is
concerned; and consequently the opportunity will remain open
for American interests to participate in the exploitation of
the petroleum wealth of the Netherlands Indies. It is,
however, understood that this policy does not imply that in
each specific instance of the granting of petroleum rights
to other than American interests, the question of the
granting of identical rights to American interests can be
raised.
In the conversations between the American Legation and the Royal
Ministry of Foreign Affairs, which were held upon the proposal of
the American Government, the Ministry thought it advisable to
request the American Legation to inform its Government that a
Netherlands company, controlling an important American petroleum
concern in which American capital likewise is interested, has as a
shareholder for a minor part of its capital a company belonging to a
nonreciprocating country. The Royal Ministry inquired how the
Government of the United States would view a request on the part of
such a company tending to obtain a concession covered by the mineral
leasing act. In reply the American Legation informed the Ministry
that in each specific case it would of course be necessary that the
fact of Netherlands control be shown to the satisfaction of the
competent officials by the production of evidence regarding the
organization and stock ownership in the American company in
question, and that these authorities would be disposed to consider
in the most friendly spirit means to facilitate access to the public
mineral lands of the United States on the part of American companies
controlled by Netherlands interests.
The
Hague, July 10,
1928.
[Enclosure 2]
The American Legation
to the Netherlands Ministry for Foreign
Affairs
Memorandum
The Legation of the United States of America at The Hague
acknowledges the receipt of the Foreign Office’s Memorandum No.
21432, of July 10, 1928, setting forth the latter’s views in reply
to a Memorandum submitted by the Legation on March 5, 1928, in
regard to the question of reciprocity between the two Governments in
matters relating to petroleum.
[Page 401]
The communication under acknowledgment confirms the Legation’s
understanding of the informal conversations which have taken place
between it and the Foreign Office. The assurances it contains
adequately meet the contentions of the American Government as set
forth in the Memorandum of March 5th.
The
Hague, July 10,
1928.
[Enclosure 3—Translation19]
The Netherlands Ministry for
Foreign Affairs to the American
Legation
No. 21433
Memorandum
In the course of the conversations between the American Legation and
the Royal Ministry of Foreign Affairs, mentioned in to-day’s
Memorandum No. 21432, the Royal Ministry pointed out that after the
granting of the concession in question the company concerned will be
able to exploit its fields under complete legal security, whereas
the situation of [sic] American companies
with Netherlands capital which desire to obtain and exploit fields
in the public lands run grave risks by the absence of legal
security.
In the first place, it should be noted that a company exploiting a
petroleum concession conferred by the Federal Government in public
lands must conform to the general laws enacted by the State in which
the concession is situated. No guarantee exists that this State will
not by its legislation render exploitation practically
impossible.
Moreover, every American citizen may contest before the courts the
legality of a granted concession. The American judicial authorities
therefore could annul in practice rights granted by the Federal
Government.
Finally, the present Government of the United States can bind only
itself with regard to the application of the mineral leasing act. A
succeeding administration might have a different opinion regarding
the interpretation and application of this law, as a result of which
American companies with Netherlands capital might not be able to
obtain any further concessions in public lands.
From the information in its possession concerning American
legislation, the Ministry of Foreign Affairs understands that in
theory the position of companies with Netherlands capital could, in
the face of the lack of legal security, be remedied either by the
conclusion of a formal treaty or by a modification of the
legislation. It is, however, of the opinion that in the present
circumstances these solutions are impracticable
[Page 402]
and that all other remedies are
defective. The Royal Ministry consequently contents itself with
merely noting the points raised above.
The
Hague, July 10,
1928.
