October 4; but, in the absence of any opinion on the subject from the President of his company, Mr. Dodson felt unable to make any statements on the oil bill. Although Judge Feuille of the Standard Oil Company of California has not seen Dr. Olaya for some time, he is continually in touch with the situation through his lawyer, Dr. Carreño, who is kept more or less informed by the Minister of Government. As reported before, Mr. Folsom of the South American Gulf Oil Company does not care to take any part in the negotiations over the new oil bill, as he feels that he should concentrate all his efforts on the Barco matter. Mr. McCulloch of the Sinclair Oil Company has not yet seen Dr. Olaya; but will be called by him in a few days to the Palace. All these representatives come frequently to the Legation and are apparently frankly endeavoring to let me know what they hear about the prospects of the bill. None of them know, however, what the others are doing: each one comes in the greatest secrecy. Respectfully yours, JEFFERSON CAFFERY 821.6363/930 The Minister in Colombia (Caffery) to the Secretary of State No. 1743 BOGOTÁ, October 9, 1930. [Received October 22.] SIR: Referring to my recent reports concerning Dr. Olaya Herrera's interviews with American oil representatives, and with special reference to my despatch No. 1740 of October 8, concerning a visit of Mr. R. I. Dodson of the Andian National Corporation, I have the honor to report that on Tuesday Mr. Dodson and Mr. Metzger of the Tropical had a two-hour interview with the President, when, as Mr. Metzger expressed it, he had "delivered a two-hour lecture on oil to Doctors Olaya, Carlos E. Restrepo, Chaux and Luis Felipe Latorre"; he had been permitted to present his full views on a new oil bill. Both Metzger and Dodson were highly pleased with the interview and felt that they had made a good impression. They were especially pleased with the attitude of the Minister of Government (Mr. Haskell had made a similar comment): Dr. Restrepo, during the discussions, upon several occasions took issue with Dr. Chaux in a sense favorable to the American oil companies. However, Dr. Olaya Herrera did not show them the oil bill (Dodson does not know, of course, of the part that Metzger has had in drafting amendments to the bill; Dr. Olaya knows it, but acted as if he didn't; the Ministers of Government and Industries know nothing of it, apparently). Mr. Metzger took occasion to state to me how pleased he was also with the attitude of Luis Felipe Latorre. (Having in mind my despatch No. 1724 of October 4, 1930, I asked Mr. Metzger whether Latorre were not attorney for the Unión Colombiana de Petróleos. Mr. Metzger said that he didn't think he was; that he might have handled legal matters for them upon various occasions, but he was not their regular attorney; that, in any event, even if he were, he did not believe he would allow that to influence him in a sense prejudicial to the American oil interests.) Respectfully yours, JEFFERSON CAFFERY 821.6363/914: Telegram The Minister in Colombia (Caffery) to the Secretary of State BOGOTÁ, October 11, 1930-noon. [Received 8:09 p. m.] 126. Department's 56, October 10, 2 p. m. Washington United Press despatch regarding Rublee received here morning of October 9th. Government was interpellated thereon in Congress and Olaya announced appointment yesterday. CAFFERY 821.6363/916: Telegram The Minister in Colombia (Caffery) to the Secretary of State BOGOTÁ, October 13, 1930-3 p. m. [Received 10:06 p. m.] 128. My telegram No. 126 October 11, noon. In reply Saturday to bitter attack of Silvio Villegas against Government's entering into Rublee contract, Minister for Foreign Affairs delivered extensive and able reply setting out Government's new petroleum policy and policy of friendship with the United States; Minister of Industries also ably defended contract. Their speeches very well received in Congress and incident was declared closed by President of House. We have probably unique opportunity during this Congress for securing a variety of much desired legislation of far-reaching effects on American interests. However, owing to peculiar conditions now prevailing here, I respectfully declare that I have immediate need now and for the next 2 months of suitable secretary as contact man in Dickson's place and will be much handicapped without him (Olaya says confidentially he will probably prolong Congress until middle December). CAFFERY 'Not printed. 821.6363/948 The Minister in Colombia (Caffery) to the Secretary of State No. 1845 BOGOTÁ, October 31, 1930. [Received November 12.] SIR: Referring to previous reports concerning the arrival of Mr. George Rublee, I have the honor to report that Mr. Rublee arrived in Bogotá on Monday last and has ever since been busily engaged in studying the petroleum project prepared by the Congressional Petroleum Committee, as well as amendments thereto suggested by Dr. Carlos A. Urueta. He has gone over the project article by article (this, of course, is a secret here) with Mr. Metzger of the Tropical Oil Company, and has also discussed it with Dr. Carlos A. Urueta, and today, in my presence, had a discussion on the subject with President Olaya. His impression is that, in general, the project is a good one and he is in accord with Urueta's suggested changes. President Olaya told us today that he was having difficulty with the Minister of Industries on the matter of the system of the parallel reserves which had been proposed by the Congressional committee; Dr. Chaux was being very insistent that, due to the geography of the petroleum structures of Colombia, it was essential for the Nation to maintain the alternate parallel reserve system suggested by the committee. He (Olaya) said that he had told Dr. Latorre to prepare a memorandum on the subject for Mr. Rublee, and he wanted him to go into the matter carefully, as he himself believed that the checker-board system was preferable; but he was finding that opposition thereto was very general here and he might have some difficulty in getting it through Congress. I suggested that Mr. Rublee, after studying the matter carefully, give his opinion in this form: that it depended upon what Colombia wanted: if they regarded the matter of reserves as most important, then the system of parallel reserves was in order; if they wanted exploitation, some other system would be better. I added that perhaps, if the parallel concessions were made broad enough, some sort of a compromise might be reached. Dr. Olaya said that he was in entire accord with both of those suggestions and hoped Mr. Rublee would work along those lines. Dr. Olaya referred again to the matter of a possible advance on the Tropical royalties, and I again told him that, while I thought the Company might well be willing eventually to do as he wishes, I knew that they would take no action at all in the desired direction until the matter of their suit before the Supreme Court were disposed of. 8 Dr. Olaya told Mr. Rublee also that, as soon as possible, he wanted him to go into the whole Barco matter; he was very anxious to have that case also disposed of during the present Congress. He had told Dr. Latorre to prepare a memorandum for him on the subject. Respectfully yours, JEFFERSON CAFFERY 821.6363/952 The Minister in Colombia (Caffery) to the Secretary of State No. 1863 BOGOTÁ, November 6, 1930. [Received November 19.] SIR: Referring to previous reports concerning the work being done here by Mr. George Rublee, and with special reference in that connection to my despatch No. 1845 of October 31, I have the honor to report that Mr. Rublee has made an excellent impression here: the Colombians he has met find him "simpatico". He has been continuing his studies of the oil bill: he has had a number of informal conversations with Mr. Metzger of the Tropical Oil Company, as well as almost daily conferences with Dr. Latorre, the consulting attorney of the Office of the Secretary General of the Presidency; also, he sees President Olaya daily at four o'clock. Metzger and Latorre have prepared for him, at his request, a number of memoranda on various articles of the bill. Yesterday he received visits from the representatives of all the American oil companies interested in the bill; requested them to state their objections to the bill; and asked them to furnish him with memoranda on all matters in that connection they considered important. He now believes that there are only two matters left which may cause difficulty: the first is that of the system of parallel zones (my despatch No. 1845 of October 31) and the other is the matter of compulsory production (see Article 20 of enclosures No. 1 and No. 2 to my despatch No. 1655 of September 23). He wants me to insist with President Olaya on the importance of amending the bill in regard to those two questions. I suggested to him last night that he should put his opinion on the articles concerned, in writing, setting out, as I had suggested before (my despatch No. 1845 of October 31: in regard to the zone system) that it was for the Colombian Government to decide what they wanted: if they wanted development, the parallel zone system was not in order; if they wanted See footnote 5, p. 3. reservations, it was. I said, when he had done that, I could take up those questions with President Olaya. Respectfully yours, 821.6363/964 JEFFERSON CAFFERY The Minister in Colombia (Caffery) to the Secretary of State No. 1883 BOGOTÁ, November 11, 1930. [Received November 26.] SIR: Referring to my recent reports concerning the work of Mr. Rublee, and with special reference in that connection to my despatch No. 1863 of November 6, I have the honor to report that Mr. Rublee has been continuing his conversations with Doctors Latorre and Chaux. Differences on the oil bill are now definitely boiled down to the matter of the zones and the matter of restricting production, and Chaux has asked Rublee for written opinions on those two matters; Rublee, in turn, has asked Mr. Metzger to prepare him pertinent memoranda, which Metzger is now engaged in getting together. In that connection, Mr. Metzger told me yesterday that he does not regard these two differences as vital; that it is all a question of degree; that, as a matter of fact, the oil companies could work in Colombia under the zone system, but that, unquestionably, some other system of reserves would be preferable. The same is true of the matter of restricting production: he believes that a formula can be found satisfying both parties. We are all agreed (Mr. Metzger, Rublee and I) that the Government is entitled to have an article put in the bill protecting them against sudden and precipitous loss of revenue through the companies suddenly suspending operations. At the same time, the companies should not be compelled to operate at full speed when the market does not justify it. Mr. Rublee finds Dr. Latorre very reasonable and conciliatory on this, and I believe that we may well find a satisfactory formula during the next few days. As to the matter of reserves, in reply to a pertinent question from Mr. Rublee, I have suggested that he endeavor to insist on Montalvo's proposed reserve system (as inserted in his last year's bill), as that is apparently acceptable to all the companies (with the idea that if worse come to worse, we may be constrained to accept the parallel zone system, however). Mr. Rublee intends doing this. Mr. Rublee is satisfied with the draft articles on the title question as now agreed to by Latorre; they provide that, in the case of disputed titles, all claimants shall submit their titles to the Supreme Court, where the matter shall be disposed of in summary procedure. He said that Haskell had given him a long memorandum on the title question |