845.6363/15
The Standard Oil Company of New York to the Secretary of State
[Received February 28.]
Sir: From statements that have been published in the press, it would appear that a recent visitor to this country, who holds a high place in British oil circles, is endeavoring to create the impression that the British Government does not discriminate against other than British nationals in granting concessions for the production of crude petroleum.
We have laid before you from time to time as it came to us, evidence that the British Government follow a well defined policy of discrimination and that, insofar as India and Burma are concerned, this discriminatory policy has been in force for thirty-eight years.
In view of the statements that are now being made denying the existence of a policy of discrimination, we trust that you will not consider it out of place if we, in refutation of these statements, review our records of the discriminatory acts we have experienced at the instance of British officials, together with other direct evidence that has been reported to us by our representatives abroad.
On March 20th, 1902, the Colonial Oil Co. of New Jersey,—a subsidiary of the Standard Oil Co. (N. J.), applied to the Government [Page 353] of Burma for a license to prospect for oil in Upper Burma. The application was made in due conformity with the local Government laws and requirements in that country relative to prospecting licenses. This application was refused on June 9th, 1902, by the local Government of Burma under instructions from the Viceroy of India, Lord Curzon, and no reason whatever was assigned for the refusal.
On June 13th, 1902, similar permission for a prospecting license was applied for on behalf of the Anglo-American Oil Company, Ltd., a British Corporation registered in 1888. In addition to making application for a license to prospect for oil, and without knowledge of any Government policy of discrimination, negotiations were entered into with native owners of freehold property for the development of their land. Prior to receipt of the official reply to the Anglo-American Oil Company’s application, Mr. W. H. Libby, representing the Standard Oil Company, appealed to the Viceroy of India for favorable consideration of the application. Mr. Libby also invoked the aid of Gen. Patterson, then U. S. Consul General in India, in the presentation of the case to the Viceroy. In reply to a request made by Gen. Patterson for an interview with the Viceroy, the Hon. W. Lawrence, Private Secretary to the Viceroy, wrote under date of October 2nd, 1902, that he was directed to say:
“It is not desired by the Government of India to introduce any of the American Oil Companies, or their subsidiary companies, into Burma, and that an interview with the Viceroy would not be attended with any other result.”
On October 2nd, 1902, the local Government of Burma issued an order prohibiting private owners of land in Upper Burma from disposing of their land to any party not first approved by the Government. This order was issued at the instance of the Government of India. On October 17th, 1902, the application of the Anglo-American Oil Company was refused by the Government of Burma, without any reason being assigned. Representations backed by the force of the U. S. Government through its Ambassador in London (who at that time was J. H. Choate) were then made to the British Government authorities in London. The British Foreign Office replied that the Government of India was not influenced in its decision by the fact that the applicant was an American Company; that the decision was given after due consideration had been paid to the special conditions of oil production in Burma, and after the Government’s policy had been deliberately adopted. They claim that the Government of India being the sole proprietor of the mineral wealth of the country throughout the greater part of India, are [Page 354] in a different position from that of most other Governments, and have, consequently, to exercise a large discriminatory power in dealing with applications for concessions.
We pass without comment the apparent contradiction between the British Foreign Office expressions, as per the foregoing, and the Viceroy of India’s written statement to the U. S. Consul General at Calcutta, as quoted in the preceding part of this letter (Page 2—paragraph 2). It is also significant that the Government of Burma on October 2nd, 1902, prohibited by notification any native owner of freehold property from disposing of his land to any party not first approved by the Government.
Following these rebuffs, we abandoned for the time being, the idea of exploiting crude oil territory in Burma and decided to confine ourselves to the departments of manufacture and commerce. With this policy in view, we purchased adequate and well located land in the vicinity of Rangoon.
On February 27th, 1905, we applied for permission to erect tanks for the storage of oil in Burma, and on April 17th, 1905, we also made the customary local application for permission to construct a refinery. It was our intention to use these facilities for the storing and refining of crude oil to be purchased from the many large and small native producers. Both of these applications were refused May 22nd, 1905, without any reason being assigned. We appealed against this decision to the Government of India but our appeal was of no avail.
Subsequent to these protracted efforts to secure a foothold in Burma, we ascertained that long prior to the first application an edict, signed by Her Majesty, Queen Victoria, had been issued which debarred the entry into Burma of any concern in which John D. Rockefeller, or Pierpont Morgan were interested. We also ascertained that an agreement exists with the Burma Oil Co. which gives the Burma Oil Co. certain protection from foreign competition in the oil fields of Burma, and one of the provisions of that agreement is—that they undertake not to join their interests in Burma with any American Trust.
That such an edict and such an agreement are in effect is not only demonstrated by events, but evidence of it is also confirmed by our knowledge of a resolution of the Government of India, which reads as follows:
“No native well owner of the Burma Oil Fields shall sell, lease, transfer, mortgage, or assign any well or well sites to any foreign Company, Trust, or Corporation, without the approval of the Government of Burma under penalty of forfeiture and confiscation, and the Government of Burma shall refuse all applications for prospecting or refining from any concern connected with Pierpont Morgan, or John D. Rockefeller, or any Company connected thereto.”
We also have knowledge of a letter written by the Burma Oil Co. to Sir Hugh Barnes, Lieutenant Governor of Burma, in which they refer to an application from the Standard Oil Company of New York, and request that the Lieutenant Governor will forbid any footing to the Standard Oil Company of New York in Burma, on the strength of an arrangement between the Burma Oil Co. and the Home Government, whereby the Home Government undertake to protect the Burma Oil Co. from foreign invasion, especially from members of the American Trusts.
The Indian Government Gazette of March 6th, 1915, contains an account of an interrogation made by one of the Indian members of the Indian Council and the reply thereto by the Government Secretary. In reply to the request by Sir Fazulbhoy Currimbhoy that the Government lay on the table the papers in relation to the policy of the Government regarding concessions in respect of oil fields, the Hon. Mr. Clark said:
“The papers relating to the policy of the Government regarding concessions in respect of oil fields, are confidential, and I regret that they cannot therefore be laid on the table. Oil winning concessions are granted under the mining rules of India but petroleum is included in what is known as the reserved list of minerals, concessions for which, as being resources of national importance, are only granted to British subjects and to companies mainly British in constitution.”
Early in 1917, one of our representatives visited Sylhet, in Assam, India, and obtained an option expiring November 15th, 1917, to purchase or lease land and mineral rights from private owners of freehold property. It was discovered by our representative that in Sylhet most of the land had been settled under what is known as the “Permanent Settlement” tenure, and which conveyed absolute title to both the surface and under ground rights. On July 6th, 1917, our representative registered with the local authorities an agreement to lease the private property secured under the option referred to above, for the purpose of prospecting for oil. We were blocked in this effort to secure a foothold by a new regulation of the Government of India, No. 11917, dated October 6th, and published in the official Assam Gazette on October 24th, 1917. This regulation prohibits any owner from transferring his interests in a mine—which expression, it is notified, includes any mineral deposits, or land known or believed to contain a mineral deposit of commercial value. Thus—before the expiry date (November 15th) of our option on the Sylhet property the Government of India by its regulation No. 11917, stepped in to prevent the transfer to us of the petroleum or mining rights on that private property.
[Page 356]The form of prospecting license (received by us in April, 1921) issued by the Native State of Kashmir, situated on the northwest frontier of India, and which is subject to administrative direction and supervision of the Government of India—bears the following words:
“The licensees shall at all times during the said term remain or be British or State subjects, or a Company, or Corporation of British or State subjects. The Chairman, or President, or other persons occupying that or any other similar position (if any) and the Managing Director (if any) and the majority of the other Directors (if any) shall be British or State subjects.”
It also refers to a cardinal principle of the license as being:
“The licensees shall be and remain British or State subjects or a Company or Corporation of British or State subjects under British or State control.”
All of the regulations quoted and referred to in this letter are still in force.
We are of the opinion that the foregoing information exhibits in a most conclusive and convincing way the obvious determination of the British Government to confine all activity relative to the production and control of petroleum to its own nationals.
It has been suggested that the Standard Oil Company of New York might test the position again by making an application for a prospecting license. We would say that we stand ready to look over the ground and renew investigations just as soon as there is any convincing evidence that the official attitude has changed and the discriminatory regulations either withdrawn or modified.
We have [etc.]