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for Alexandria refinery (see Legation's 194 and 196 January 29 and 205, January 30 30) and petroleum exploration programs of American companies in Egypt.

American companies here express grave concern over their ability to develop Egyptian wells and export petroleum at competitive prices after paying 15% mining royalties to Egyptian Government, import duties on machinery and equipment, various local taxes and the new export duty. British interests are in a more favorable position because a very large proportion of their production is marketed in Egypt and they are not dependent upon export business.

It would appear that if the proposed oil projects in Egypt and especially the refinery in Alexandria were not exempted from the burden of the new export duty they would operate at a considerable disadvantage in comparison with Middle Eastern wells and refineries outside Egypt.

KIRK

883.6363/93 : Telegram

The Minister in Egypt (Kirk) to the Secretary of State

CAIRO, February 10, 1944–6 p. m.

[Received February 11-4:10 p. m.] 306. The American oil companies operating in Egypt are disturbed because they have not been able through their usual contacts to obtain a satisfactory explanation of the reasons which actuated the Egyptian Government in imposing the export duty of 15% ad valorem as well as a statement as to the nature of the application envisaged (see Legation's 232, February 2). British Embassy at instigation of Shell Company is asking Minister of Finance $1 for explanation and I am approaching the Foreign Office informally and orally on the same thing.

The following theses have been put forward as possible reasons for the new export duty which has been stated to apply to crude oil petroleum products and all other exports except cotton and scrap metals (which are subject to specific rates) :

(1) The Egyptian Government did not have petroleum in hand [mind?] when the duty was imposed.

(2) The Egyptian Government did have petroleum in mind and the duty was aimed at the Shell Company which is exporting asphalt from Suez.

(3) The duty is intended to remain in force for only 1 year for the purpose of balancing the budget.

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(4) The British have through the duty on petroleum to handicap the operation of the Alexandria refinery and the pipe line leading to it (sic).

KIRK

883.6363/93: Telegram

The Acting Secretary of State to the Minister in Egypt (Kirl)

WASHINGTON, February 29, 1944–5 p.m. 413. Your 232 of February 2, 1944 and 306 of February 10, 1944. Please keep the Department fully informed with respect to the reasons for the new 15 percent export duty, the nature of the application envisaged and particularly the effects it may have upon the development of American petroleum interests in Egypt.

STETTINIUS

883.6363/96 : Telegram

The Minister in Egypt (Kirk) to the Secretary of State

32

CAIRO, March 3, 1944—noon.

[Received 5:46 p.m.] 499. Department's 413, February 29, 5 p. m. Foreign Office has not

5 as yet replied to informal memorandum referred to in Legation's airgram 95, February 19 82 asking for information concerning details of manner of application of new 15 percent export duty but basic fact remains that as matter now stands tax applies to all petroleum products.

After informal discussions with Foreign Office and Minister of Finance, Legation has every reason to believe that tax was imposed purely as a revenue raising measure and was intended to be applied only for duration of hostilities.

I have, however, pointed out orally to appropriate Egyptian officials including Under Secretary for Foreign Affairs and Cabinet member that American oil interests now preparing to resume exploration operations in Egypt state that they are so seriously concerned at the effect of a 15 percent export duty being added to the usual 15 percent royalty payable under mining regulations that they are considering abandoning operations.

Present status is that Government Commissioner for Customs who is now dealing with question on behalf of Minister of Finance has just stated to officer of Legation that he does not feel that Egypt's best interests are served by imposition of any export duty, that he was not consulted prior to issuance of present export tax decree and believes it to be highly objectionable means of raising relatively small amount of revenue. He states he is now strongly urging Finance Minister with considerable hope of success to have a decree issued repealing the whole tax.

82 Not printed.

British Embassy states it has received information from Commissioner for Customs similar to that given Legation and being hopeful that question may be settled soon is exercising no further pressure for time being.

In view of foregoing, Legation is not urging matter further for a few days.

KIRK

883.6363/100 : Telegram

The Minister in Egypt (Kirk) to the Secretary of State

CAIRO, March 24, 1944—noon.

[Received 7:46 p. m.] 693. My 499, March 3 and previous. Today's press reports that Minister of Finance interview granted to Egyptian Gazette announced removal of 15 percent export duty as of March 22.

While Legation is unable to obtain official confirmation of foregoing today due to Moslem holiday and while removal could not be considered definite until publication of decree in official Gazette the report bears out recent informed statement to Legation by Minister of Finance to effect that he had definitely decided to remove tax and that official action would be taken “within a week”.

Local representatives of interested American oil companies have called Legation to express their satisfaction at abolition of tax.

Legation will inform Department as soon as duty removal is officially promulgated.33

KIRK

33 In telegram No. 738, March 28, 6 p. m., the Minister in Egypt reported that the Journal Officiel of March 25 published a royal decree abolishing the 15% export duty, while maintaining “higher specific export taxes introduced for cotton and a few other products ..." (600.837/16).

ETHIOPIA

GIFT BY THE EMPEROR OF ETHIOPIA OF PROPERTY, TO CONSTITUTE A PERMANENT HOME FOR THE AMERICAN LEGATION IN ETHIOPIA

124.841/9–1344

The Minister in Ethiopia (Caldwell) to the Secretary of State

1

No. 224

ADDIS ABABA, September 13, 1944.

[Received September 22.] SIR: Supplementing my telegram No. 179, September 6, 9 AM, and previous correspondence, I have the honor to transmit herewith a letter from His Imperial Majesty, the Emperor, addressed to the President, giving to him "in fee absolute and in full and complete title and possession, the realty and premises, together with all appurtenances thereto and furnishings and moveables located thereon, on which is situated at Addis Ababa the Legation of the United States of America, together with certain additional realty specified in an attached document and deemed to be necessary and proper in order to provide an appropriate residence for the diplomatic representative”. A copy of this letter is attached for the files of the Department and an additional copy of the letter together with a copy of its enclosure (map of the property conveyed) is being retained in the files of this Legation. The map is referred to in the letter as “an attached document”.

There is also enclosed a copy of a letter from the Emperor's private secretary, Mr. T. Worq, No. 1556/44, dated September 4, 1944, stating that the grant is "of the realty and premises, together with all appurtenances thereto and furnishings and moveables located thereon, on which is situated at Addis Ababa the Legation of the United States of America. A document, attached to the letter under reference, has also been enclosed from which it will be seen that certain additional realty has also been accorded.”

I have ascertained from oral inquiry from Mr. John Spencer, the American advisor to the Foreign Office, that it is the intention of the Emperor to include in the gift everything belonging to the Imperial family now on the property, including the buildings with their contents—furniture, furnishings, table silver and dishes. I have been informed further by Mr. Spencer that it is the intention that the

* Not printed.

71

gift shall be as of date of occupancy of the premises, August 26, 1943, and that no rent is to be charged from that time to the present; Mr. Spencer stated that a statement to this effect will be given to me in writing, but it has not yet been received.

Attention is invited to the statement in the letter to the President that the property now being presented was the "ancestral property of the royal family". As I reported to the Department in my telegram No. 82, May 6, 9 AM, the Steward of the Empress informed me at that time that it would not be possible for the United States Government to purchase this property or to obtain it on a long lease as the Empress had decided to reoccupy it at the end of three years. This property had been owned by the Mother of the Empress and in view of these circumstances the action of the Emperor in presenting it to the President is the more deserving of appreciation.

The additional ground referred to in the letter of the Emperor consists of a strip of level ground adjoining the original Legation grounds and is very desirable for building sites for occupation by members of the staff of this Legation. This additional ground was added upon my mere suggestion that it would be desirable for the Legation to have that ground for the purpose indicated.

I wish to emphasize that the gift by the Emperor was purely voluntary and not due even to so much as a suggestion from me. Respectfully yours,

J. K. CALDWELL

[Enclosure] The Emperor of Ethiopia (Haile Selassie) to President Roosevelt

ADDIS ABABA, 24 August, 1944. GREAT AND Good FRIEND: It gives Us great pleasure to give over to you as Chief of the great and friendly Power, the United States of America, in fee absolute and in full and complete title and possession, the realty and premises, together with all appurtenances thereto and furnishings and moveables located thereon, on which is situated at Addis Ababa the Legation of the United States of America, together with certain additional realty specified in an attached document and deemed to be necessary and proper in order to provide an appropriate residence for the diplomatic representative of a Power so highly esteemed as is the Nation of which you are the Chief.

In giving over this property, it is our pleasure to be giving personally to you and through you to the American Nation, ancestral property of the Royal Family. May the measure of our particular

* Not printed.

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