ment 15 by which the Company obtains a petroleum concession of approximately 36,000 square miles to the east of the Tigris River. The Consul at Baghdad now reports that he has learned on good authority that the Iraq Government is to commence negotiations on May 1 with the British Oil Development Company which presumably will seek a concession for all or a part of the remaining oil bearing lands in Iraq. Please inform the Foreign Office that in view of the provisions of article II of the tripartite convention of January 9, 1930,16 and the provisions of paragraph numbered 1 of the protocol signed on the same date," this Government is confident that the Iraq Government will not grant a concession covering any of the oil lands in question before affording individuals and corporations of American nationality an equal opportunity to bid thereon. You may add that in the event that the Iraq Government should attempt to grant a concession without affording American nationals an equal opportunity to bid, this Government would of course rely upon the British Government to intervene to protect American treaty rights. The American Consul at Baghdad is being instructed to bring this Government's viewpoint in the matter to the attention of the Iraq Government. STIMSON 890g.6363, Wemyss, Lord/74 The Consul at Baghdad (Sloan) to the Secretary of State [Extracts] No. 273 BAGHDAD, May 27, 1931. [Received June 19.] SIR: I have the honor to refer to despatch No. 260, dated May 13, 1931,18 concerning the desire of the Iraq Government to grant oil concessions to the British Oil Development Company and to make a further report on that subject. On Sunday, May 24th, I called upon Dr. Abdullah Damluji, Minister for Foreign Affairs, because I had heard that negotiations had been initiated a day or so before between representatives of the British Oil Development Company and representatives of the Government with regard to a concession for that company. Dr. Damluji informed me that his unofficial opinion was that the Iraq Government would within a few days make a public announcement of its adherence to the open door policy with regard to oil concessions in Iraq. It might be mentioned that Dr. Damluji has made the same statement on two or three occasions, and that on May 5th he promised to let me have a definite answer to the Department's protest in "two or three days”. I asked him whether negotiations were now going on between representatives of the Government and representatives of the British Oil Development Company, and was informed that he knew nothing officially about such negotiations but that he had heard unofficially of some conferences between the representatives of the company and the government. As this despatch was being typed Mr. Kasperkhan, local representative of the George F. Getty Oil Company,1o brought to the Consulate a confidential note which he had just received from the Prime Minister to the effect that the Iraq Government was now prepared to consider any definite offer for oil concessions in Iraq. Respectfully yours, ALEXANDER K. SLOAN 890g.6363/300: Telegram The Chargé in Iraq (Sloan) to the Secretary of State BAGHDAD, June 22, 1931-10 a. m. [Received June 22-4:37 a. m.] 8. Press report June 21 announced that Government is prepared to accept application for oil concessions covering any part or all territory not now covered by concessions. Applications should contain area and the term desired as well as financial ability fulfill obligations. The Government reserves the right to select for further investigation any proposal appearing to be to the best advantage of the State but selection shall not bind them to grant a concession. Applications must be submitted before September 30th, this year. Copy to European Information Center. SLOAN 890g.6363/301 : Telegram The Chargé in Iraq (Sloan) to the Acting Secretary of State BAGHDAD, June 29, 1931-11 a. m. [Received June 29-6:50 a. m.] 9. Information sent to the Department in my telegram 8, June 22, 10 a. m., confirmed by Minister for Foreign Affairs. Application 19 An American firm. should be submitted by registered letter addressed to the Minister of Economics and Communications. SLOAN 890g.6363/306 The Chargé in Great Britain (Atherton) to the Acting Secretary of State No. 2122 LONDON, July 18, 1931. [Received July 30.] SIR: I have the honor to refer to the Embassy's cablegram No. 245 of July 18, 12 noon,20 and to previous correspondence regarding oil concessions in Iraq, and to transmit herewith a copy of a communication from the Foreign Office under date of July 17, with enclosure, upon which the cablegram in question was based. Respectfully yours, RAY ATHERTON [Enclosure] The British Assistant Under Secretary of State for Foreign Affairs (Oliphant) to the American Chargé (Atherton) No. E 3580/5/93 [LONDON,] 17 July, 1931. MY DEAR ATHERTON: In the absence of the Secretary of State and of General Dawes, I write to let you know that the question raised in His Excellency's letter of April 23rd 21 to Mr. Henderson 22 on the subject of oil concessions in Iraq, have been carefully considered and have been brought to the notice of the Iraqi Government. To obviate any misunderstanding which may exist, I would draw attention to the fact that Article 11 of the Anglo-Iraqi Treaty of October 10th, 1922, 23 and article (1) of the Protocol attached to the Tripartite Convention of January 9th, 1930, relate only to discrimination on grounds of nationality. In the opinion of His Majesty's Government, they do not require that every concession shall, before being granted, be put up to public tender, but only that in all matters relating to the grant of concessions, the decision of the Iraqi Government must be based upon the best interests of Iraq, to the exclusion of all considerations of nationality. The Iraqi Government did not of course themselves seek out or approach the British Oil Development Company. It was the Company which took the initiative and approached the Iraqi Government with certain offers and it is the opinion 20 Not printed. " Not printed; see telegram No. 103, April 22, 6 p. m., to the Ambassador in Great Britain, p. 604. "Arthur Henderson, British Secretary of State for Foreign Affairs. of His Majesty's Government that other oil interests have had similar opportunities and sources of information, and that it has been open to them to approach the Iraqi Government in the same way as did the British Oil Development Company. Had they done so, the Iraqi Government would have felt themselves bound to consider, and undoubtedly would have considered, their offers in the same way as they have considered the offers made by the British Oil Development Company. In fact, however, the Iraqi Government have not at present granted any concession to the British Oil Development Company, and, although they cannot bind themselves to postpone indefinitely the grant of concessions in the remaining available oil bearing land in Iraq, the United States Government will see from the terms of a notice issued in the Iraq Official Gazette on June 21st (a copy of which I enclose for convenience of reference 24) that they are still free and willing to consider offers which may be made to them before September 30th next, by any other oil interests, in respect of the whole or any part of the area remaining outside the concessions already granted to the Iraq Petroleum Company and the Anglo-Persian Oil Company. Yours very sincerely, 890g.6363/306 LANCELOT OLIPHANT The Secretary of State to the Chargé in Great Britain (Atherton) No. 1011 WASHINGTON, November 27, 1931. SIR: Reference is made to the Embassy's despatch No. 2122 of July 18, 1931, enclosing a copy of a communication from the Foreign Office regarding the question of oil concessions in Iraq. It is noted that in the opinion of the Foreign Office the provisions of Article 11 of the Anglo-Iraq Treaty of October 10, 1922, and paragraph (1) of the Protocol attached to the Tripartite Convention of January 9, 1930, “do not require that every concession shall, before being granted, be put up to public tender, but only that in all matters relating to the grant of concessions, the decision of the Iraq Government must be based upon the best interests of Iraq, to the exclusion of all considerations of nationality". The Department does not consider it necessary to enter into a formal discussion of this statement with the Foreign Office, since it is possible that it may be susceptible of an interpretation substantially acceptable to both Governments. However, in order to obviate the possibility of any future misunderstanding, it is considered desirable that you seek an early occasion to present informally to the Foreign Office the following views of the Department on certain aspects of the question. It is suggested that these views might appropriately be presented in the form of a letter to Mr. Oliphant as a reply to his communication of July 17, 1931, addressed to the Counselor of the Embassy. In the first place, this Government would not wish to insist that each and every concession for the development of natural resources in Iraq must, before being granted, be put up to public tender. Thus, it is recognized that it would be proper for the Iraq Government to grant a concession for the exploitation of certain of the natural resources of Iraq to native inhabitants of the country, who were technically and financially in a position to operate it, without calling for bids from nationals of the United States or from other foreign nationals. In a case of this kind it would of course be understood that the concession was actually for the exclusive benefit of the native inhabitants of Iraq and that it would not be turned over to the nationals of a foreign country. Again, in the case of small local concessions of minor importance it is recognized that it might be uneconomic and impracticable to call for tenders when such a course would involve an undue delay in the development of an essential project or excessive expense or inconvenience in relation to the scope and importance of the project. A certain reasonable latitude may be permissible in cases of the character mentioned in order to secure the promotion of enterprises which are clearly for the benefit of the native inhabitants of Iraq. In the opinion of this Government, however, cases of this character are the rare exception to the general rule which appears clearly to require that no concession for the development of the natural resources of Iraq shall be granted to any foreign (i. e. non Iraqi) national, unless the nationals of the United States are given a reasonable opportunity to compete therefor. Such reasonable opportunity can in practice be afforded only if all projects for the development of the natural resources of Iraq are opened to competitive offer, which usually means an invitation to public tender. This Government considers, therefore, that the failure of the Iraq Government to observe a suitable procedure which definitely assures competitive opportunity, except in the case of special circumstances such as those discussed above, would ipso facto constitute a case of discrimination in violation of the pertinent provisions of the Tripartite Convention of January 9, 1930, and of the Protocol attached thereto. The Department will look forward with interest to receiving a report of the informal representations which you undertake at the Foreign Office in accordance with these instructions. For the Secretary of State: W. R. CASTLE, JR. Very truly yours, |