856d.6363/2
The Secretary of State to the Minister in the Netherlands (Phillips)
Sir: Referring to the Department’s despatch No. 1162 of April 3, 1920, transmitting a copy of a report from the American Consul at Batavia, dated January 27, 1920, on mineral oil concessions and rights in Netherlands India, and requesting an expression of your views regarding the advisability of making representations to the Netherlands Government on the subject, there is transmitted herewith a copy of a despatch from the American Consulate General at Rotterdam, dated March 25, 1920,3 on oil concessions in the Dutch East Indies.
It is understood that the proposed legislation, referred to in the despatch from the Consulate General, provides for the organization of a company, to be known as the “Djambi Aardolie Maatschappij”, which is to be controlled by citizens of the Netherlands and which is to be granted the exclusive right to exploit the petroleum resources of an area in the island of Sumatra of approximately one-third of the Djambi Residency. This region is apparently in central Sumatra which was referred to on page four of the report of the Consul at Batavia as “the most valuable mineral oil fields in the whole Colony”. This proposed legislation is believed to be a further manifestation of a policy the effect of which has been to exclude American citizens from petroleum development in the Netherlands East Indies and incidentally to retard the production of petroleum in those regions.
If the States-General take under consideration the proposed legislation, or any other legislation the effect of which will be to give [Page 267] interests other than American exclusive privileges with respect to petroleum development in any part of the Netherlands East Indies, you are instructed to inform the Department at once by means of a cipher telegram. If the enactment of such legislation seems to you to be imminent, or if, in your opinion, delay will increase the possibility of its enactment, you are instructed to make representations to the Netherlands Government, basing your representations on the facts and considerations embodied in the Department’s previous despatch, the report from the Consul at Batavia, and the despatch from the Consul General at Rotterdam. It is suggested, however, that it may be possible by informal conversations with officials of the Netherlands Government to convey effectively the views of this Government regarding such legislation and possibly to obtain such a relaxation of the restrictions now operative in the Netherlands East Indies as to make further diplomatic action unnecessary. It is essential that the Department should be kept fully and promptly informed regarding any proposals of legislation affecting in any way the participation of American citizens in the petroleum resources of the Netherlands East Indies.
I ah [etc.]
- Not printed.↩