856.6363/45
The Minister in the Netherlands ( Diekema ) to the Secretary of State 11
[Received December 13.]
Sir: I have the honor to acknowledge the Department’s confidential circular instruction of October 28th last (File No. 841.6363/359b), requesting information as to the legal and actual status of British oil companies operating in Dutch controlled territories with a view to ascertaining whether any British companies enjoy practical advantages in Dutch territories which are denied to American corporations in such a manner as would constitute effective discrimination against American companies in favor of companies of British nationality.
Before taking up the points enumerated in the Department’s instruction, I may state that no discrimination in favor of companies of British nationality exists in Dutch territories. This statement is concurred in by the Commercial Attaché and Consul General Hoover.
Foreign corporations can operate mineral concessions in Holland either as branch offices or as companies incorporated under the Dutch law. If the latter alternative is adopted, the majority of the managing directors must be of Dutch nationality. The capital, however, may come entirely from abroad and foreign companies doing business here have found that it facilitates their work to incorporate locally.
The first of the Department’s enumerated questions inquires whether foreign corporations may in fact operate mineral concessions or whether such operations are reserved to Dutch controlled companies. There is no oil exploitation in Holland and it is presumed that the situation in the Dutch East Indies will be reported on in detail by the Consul General in Batavia. The Netherland Coloniale Petroleum Company, however, which is affiliated with the Standard Oil Company of New Jersey, maintains an office in The Hague. This company, as the Department is aware, has recently secured large oil concessions from the Dutch East Indian Government. Its principal American representative in Holland informs [Page 548] me that no discrimination exists against his company in favor of British companies, either here or in the East Indies.
The only mineral which is obtained to any extent in Holland is coal and that exists only in the southeastern part of the country. All sub-soil rights belong to the government but in the past several concessions have been given to foreign interests which usually do business through subsidiaries incorporated under Dutch law. The principal foreign concessionnaire is the Maatschappij tot Exploitatie van Limburgsche Steenkolenmijnen Genaamd Oranje-Nassau-Mijnen, the capital of which is entirely French. This company produces some two million tons of coal a year and two other small companies, with largely Belgian capital, produce a half million tons. There are no British or American companies engaged in coal mining in Holland. When the Dutch government realized that coal could be mined profitably, it ceased granting concessions to companies of any nationality and commenced mining on its own account, with the result that the present output of the government mines amounts to about six million tons annually.
As regards the leasing of land, exploitation, production, transportation, storage, export and selling or distribution of petroleum and petroleum products, there is no discrimination against the operations of American companies in favor of British or other foreign oil companies. The American Petroleum Company, the Sinclair Oil Corporation, and the Texas Oil Corporation are engaged in Holland in the marketing of oil. They all do business through subsidiaries which are incorporated locally. There is no discrimination against these companies in favor of the British Petroleum Company—a subsidiary of the Anglo-Persian—or in favor of any other British company.
I have [etc.]
- A similar reply to the Department’s instruction of October 23 was received from the Embassy in Great Britain, in despatch No. 468, December 3, 1929; not printed (856d.6363/597).↩