871.631/4
The Chargé in Rumania (Patterson) to the Secretary of State
[Received July 23.]
Sir: I have the honor to refer to the Legation’s despatch No. 596 of June 22, 1928 concerning the publication of the new Mining Law regulations and the informal action which I subsequently took in this matter and to report that on June 27 there appeared in the government-controlled press the following announcement:
“Concerning the mining regulations applicable to oil companies operating in Rumania, it is stated that the advance project which was published by mistake is not the definite project, the latter which is actually being printed now states that the dispositions of the Mining [Page 812] Law relative to the percentage of foreign and Rumanian personnel no longer apply to the central organizations of oil companies. Concerning the field service no modifications will be made affecting the actual situation. Basically the Mining Law itself allows a tolerance of seven years concerning the field service.”
At first glance it would appear that my unofficial visit to Mr. Mrazec had had some results, but actually the benefit to the Romano-Americana is practically nil, for on July 3 when the company’s lawyer (a Rumanian) interviewed the Minister of Commerce and Industry concerning the “definite project”, he was informed that probably no change would be made after all.
Wishing to inform the Standard Oil Company of New Jersey Paris Office as quickly as possible and not being able to express his opinions freely by ordinary telegraphic means without endangering the position of the company, Mr. Hughes, the Director of the Romano-Americana, requested me on July 4 to send, as had previously been done in 1924, a message in code. This I did, it reading as follows:
“For Seidel 82 Avenue Champs Elysees from Hughes quote 04711 Your 164 Unofficial promises made by the Ministers to modify feature regarding 75% of each category employees have not been fulfilled. We doubt Government’s sincerity as to making serious modifications. It is possible Government will not press the matter at this time awaiting a moment more favorable to the Government for enforcing the regulations and thus causing complete disorganization of foreign companies. Luca and I doubt the sincerity of the Government’s expressed desire to give us any real assistance in regard to Embatic Lands or any other matter.”
There is no need to enlarge on the expressions concerning the percentage of employees contained in this telegram, but the final sentence is of importance, for in Despatch No. 565 of March 31, 1928 Mr. Culbertson reported to the Department that Mr. Mrazec, the Minister of Commerce and Industry, had called at the Legation, saying that he spoke for Mr. Bratiano, and had given definite assurance that the subsoil rights in embatic lands would be restored to the Romano-Americana and that all concessions taken by the Romano-Americana on these lands before the enactment of the socalled interpretive law of 1926 would be recognized following the adjustment of the question of royalty.
Later in the Legation’s Cablegram No. 16 of April 11, 192811 it was stated that the Romano-Americana had accepted the proposal of the Rumanian Government for the settlement of the dispute concerning these rights, and in despatch No. 572, two days later, there was forwarded to the Department a copy of the draft convention, drawn up by the Rumanian Government between the government and the Romano-Americana to be signed in the immediate future.
[Page 813]According to Mr. Hughes, the Rumanian Government has never had the slightest intention of signing this convention, notwithstanding Mr. Mrazec’s statements to Mr. Culbertson, and from present indications the Rumanian oil industry as far as foreign capital is concerned is rapidly approaching the most serious point in its history.
I have [etc.]
- Not printed.↩