374.115 Standard Oil Company/2: Telegram
The Secretary of State to the Minister in Bulgaria (Shoemaker)
8. Your despatch No. 291, September 21, 1931. The Department assumes that you have satisfied yourself as to the accuracy of the [Page 889] contentions of the Standard Oil Company. Upon that assumption it is desired that you seek an immediate interview with the Prime Minister and inform him of the concern felt by this Government over the recent administrative action of the Commission for the Reduction of the Cost of Living in arbitrarily fixing the wholesale price of kerosene at a figure which clearly appears to be less than the cost of importing kerosene into Bulgaria.
The effect of the order on the Standard Oil Company will be to force it to sell its products at less than cost and thereby subject its property to direct confiscation without due compensation and to possible imposition of penalties. This course would result in the violation of a generally recognized principle of law expressive of elementary justice and would also disregard the provisions of paragraph three of Order 69 under which the Commission purports to act and which clearly provides that all the elements of the cost of importing kerosene into Bulgaria “plus a certain profit” shall be considered in fixing the wholesale price. Since the price established by the Commission is substantially less than the total of all the legitimate items of cost prescribed by Order 69, it is evident that the Commission acted beyond the scope of its authority and that its decision should be corrected by an adjustment of the matter which will meet the wishes of the Government of Bulgaria and at the same time insure equitable treatment to the American company concerned.
As evidence of the arbitrary character of the Commission’s action and the inadequacy of the investigation on which that action was based, it need only be observed that the Standard Oil Company was not asked for or given any opportunity to present the facts as to the cost of importing kerosene into Bulgaria and that the Company is in a position to prove that the price fixed by the Commission disregarded the provisions of paragraph three of Order 69.
You will accordingly state that this Government is confident that the Government of Bulgaria will without delay take the necessary steps to prevent the serious injury to the property rights and interests of American citizens in Bulgaria which results from the application of the Commission’s order to the Standard Oil Company. You should leave an aide-mémoire of the foregoing with the Prime Minister at the time of your interview.
If you consider it advisable you may make a discreet oral suggestion that if the Bulgarian Government is seriously interested in reducing the cost of kerosene to consumers it would appear that such a result could be accomplished by lowering the present import duties, which amount to nearly 800 per cent ad valorem, rather than by seizing the property of an American company without due compensation.