[Enclosure]
The American
Embassy to the British Foreign
Office
Memorandum of
Conversation
In a note from the British Foreign Secretary, dated April 9, 1932
(No. E 1733/121/91), regarding an application of the Eastern and
General Syndicate, Limited, for an oil concession in Koweit,
reference is made to the extended period of time that oil
companies have been interested in oil lands in Koweit.
The Eastern and General Syndicate initiated and carried on
negotiations with the Sheikh of Koweit for an oil concession in
his Principality with the knowledge and approval of the British
Government
[Page 21]
but it was
not until after American interests became associated in the
venture with the Syndicate in 1927 that the British Government
required (in 1928) the inclusion in the concession agreement of
a “nationality clause”, which clause would have the effect of
excluding any but purely British interests from exploiting such
a concession.
Thus the Syndicate for years prior to 1927 and in agreement with
American interests since 1927 has continuously endeavored to
obtain a concession in Koweit very similar in principle to a
concession which, with the knowledge of the British Foreign
Office, had been granted to the Syndicate in the Bahrein
Islands.
Last December American interest in the Koweit concession formed
the basis of representations by the American Ambassador to the
British Secretary of State for Foreign Affairs. In referring to
these representations, the Foreign Office note of April 9,
mentioned above, stated that “His Majesty’s Government for their
part are prepared to agree to the omission from any oil
concession, which the Sheikh may be prepared to grant, of a
clause confining it to British interests.…”
On September 6, 1932, however, the American Embassy, in a note to
the Foreign Office urged that early appropriate steps might be
taken, that this statement become effective, and that the
American interests involved might be placed in as favorable a
position as a British oil company in having its application
considered by the Sheikh of Koweit. In acknowledging this note
of September 6, a Foreign Office note in reply stated: “His
Majesty’s Government decided they could not advise the Sheikh to
give preferential treatment to the Eastern and General
Syndicate”. In the opinion of the Department of State, some
misunderstanding may exist in the mind of the British Government
in this connection, since no preferential treatment has been
asked for American interests, nor has any been granted.
It may be recalled that the American Ambassador, in discussing
the Koweit oil concession with Sir
John Simon last December, pointed out that the
Eastern and General Syndicate had initiated and carried on its
negotiations with the Sheikh with the knowledge and approval of
the British Government; that the Syndicate had offered the
Anglo-Persian Oil Company the opportunity, over six years ago,
to interest itself in the Koweit oil concession which
opportunity that company declined; that according to his
information it was only after efforts to interest the
Anglo-Persian Oil Company and other British groups in the said
concession that the Syndicate sought to interest and, in
November 1927, succeeded in interesting the American company
since then associated with it in the venture; that it was after
these American
[Page 22]
interests
became associated with the Syndicate in 1927 that the British
Government in 1928 insisted upon the inclusion of a “nationality
clause” which for a period of several years from that date had
prevented the Syndicate from consummating with the Sheikh the
concession it sought. Since the withdrawal of the Anglo-Persian
Oil Company in 1926, it is only, I understand, during this last
year (1931-1932) of the Eastern and General Syndicate’s
negotiations that the Anglo-Persian Oil Company (in October
1931) manifested further interest in Koweit. On the contrary,
the Syndicate has been conducting its negotiations with
unceasing activity for many years. It may also be recalled that
it was not until April of this year that the British Government
reached any decision to the urgent representations initiated by
the American Ambassador in the latter part of last year.
In a most recent Foreign Office note it was stated that the
Anglo-Persian Oil Company submitted a draft concession for
consideration in August last, and study of this Anglo-Persian
draft will necessitate further and considerable delay in His
Majesty’s Government’s reaching any conclusion regarding the
draft concession which subsequent to receipt of the Foreign
Office note of April 9, 1932, the Eastern and General Syndicate
submitted to the Sheikh on May 26, thus renewing its application
for the Koweit oil concession which, as above indicated, it has
been negotiating in association with American interests
unremittingly for many years.
With reference to representations made by the American Ambassador
to the Foreign Secretary in December, it may be well to draw
attention to General Dawes’ letter to Sir
John Simon of December 22, pointing out the
Mining Lease Act of February 25, 1920, regarding lands under
which British subjects are given the same treatment as American
citizens. The text of this letter reads as follows:
[Here follows text printed on page
4.]
In conclusion, it may be realized from the above facts that for
more than four years American interests, in agreement with the
Syndicate, have been seeking to obtain an oil concession in
Koweit, and for approximately the last year of that time
representations have been made by the American Embassy, seeking
for its nationals in this matter such opportunities as British
subjects receive in the United States. In this connection, the
American Embassy pointed out only recently that opportunity to
American interests seems to be obstructed by the arbitrary
decision of His Majesty’s Government, as set forth in the
Foreign Office note to this Embassy of September 16, containing
a refusal to inform the Eastern and General Syndicate at this
time whether that portion of the draft concession submitted by
it (namely
[Page 23]
Clause 8) was
satisfactory from the point of view of safeguarding the
interests of His Majesty’s Government, and, if not, to state
wherein the said conditions failed to satisfy in safeguarding
the interests of His Majesty’s Government.
The Department of State has therefore instructed the American
Embassy to review the facts with the Foreign Office and to
request that this matter, which has been delayed for over a
period of four years, may be expedited by the British
authorities to the end that such action may be taken as will
permit the Sheikh now to come to a decision.
London,
November 1,
1932.
