Front matter (continued 3)

The United States replied that eighteen years from now all their oil would be exhausted, and they would not even be able to satisfy their home consumption. The orders for 1920 exceeded the output. "Not so!" replied the British. The excessive demand caused the price of oil to rise, and the demand then diminished in reaction. You have even been obliged to lower the price. The price of Pennsylvanian crude oil fell from 6.10 to 3.00 dollars a barrel between December 1920 and April 1921. And as Mexico is developed the swing of the pendulum will continue in the same direction. But you need not fear the exhaustion of American petroleum. Read the reports of your experts. Mr. David White, of the United States Geological Survey, has given his opinion that the American fields will have passed maximum production in a few years' time. Mr. Lane, formerly Secretary of the Interior, has gone even further, and has estimated the percentages of exhaustion of the main oil-fields as follows:—

Lima, Indiana 93 per cent.

Appalachian 70 per cent.

Colorado 65 per cent.

Illinois 51 per cent.

But Mr. White himself admits that there are in the United States many oil-fields insufficiently exploited or even still unknown. As for Mexican petroleum, which is said to be threatened by salt water, there is no need for uneasiness. Exploitation there is only just beginning and will produce many pleasant surprises.

Lord Curzon, moreover, sweeps aside all statistics with a disdainful gesture. We cannot trust their accuracy, he says. But this gesture did not impress the United States; they were determined to obtain satisfaction at any price.

FOOTNOTES:

CHAPTER XV

THE AMERICAN RETORT

The United States began to retort by feverishly carrying out a naval program which aimed at depriving Great Britain of the supremacy of the sea. They built an immense merchant marine, which already numbered, on June 30, 1920, more than 28,000 ships. And their dockyards were busy constructing battleships more powerful than those of Britain. At the Washington Conference, Great Britain was obliged to renounce her claim to the sole naval supremacy. Besides, she could not have continued to struggle for it. The United States can devote hundreds of millions of pounds to their fleet without inconvenience, but Great Britain, who has suffered more from the War, and whose budget—if we are to believe her statesmen—is balanced with difficulty, could not do so. The British people are so over-burdened with taxation that it would be impossible to obtain more from them.

If Great Britain is no longer sole mistress of the seas, what use, in case of war, would be the enormous oil-deposits of which she has secured the possession in Central America, Mexico, and on both sides of South America? What would be the use of all the work of the British Controlled Oil-fields?

But if Great Britain still possessed naval supremacy in the same proportions as in 1914, it would be sufficient for America to have a fleet equal to the former German fleet in order to prevent her access to the Caribbean Sea. The British fleet would never dare to venture there. It would do as it did from 1914 to 1919!

Now, if the American fleet is in a position to prevent access to the American coast and to the Gulf of Mexico, its adversaries may have the most powerful battleships in their naval bases and the most imposing reserves of motor-lorries and aeroplanes in their depots, yet all these forces, in the present state of oil production, run the risk of being paralysed for want of sufficient supplies.[35]

But the United States are not content with wanting to deprive Britain of her naval supremacy. By threatening reprisals on their territory against the Royal Dutch-Shell and British companies, they compelled the British Government to give way on questions concerning Palestine and Mesopotamia. The Americans were all the more furious to see their prospectors arrested in Palestine, because they had obtained the right to make borings there, before the War, from the Turkish Government. The whole of the valley of Yarmak, the neighbourhood of Bethlehem (Vebi Musa), the south of the Dead Sea, and the east of the Jordan, were to be prospected by the Standard.[36] Moreover, by the General Leasing Act of 1920, the Federal Government obtained authority to exact from every oil company operating in the United States, that it should number none but American citizens among its shareholders. A judicial decision has just been given, refusing to British citizens the right to become shareholders in a company of this kind. Moreover, Mr. Daniels, Secretary of the Navy, wished to get a Bill passed through Congress, authorizing the President to place an embargo on the export of petroleum. The Royal Dutch-Shell, which now draws 43 per cent. of its output from the United States, would thus be unable to transport it to Great Britain. But on this point he is in conflict with Mr. Payne, the new Secretary of the Interior, who thinks the above-mentioned Bill a sufficient protection for the United States. This Bill forbids the leasing of wells by a corporation of foreign shareholders, unless these latter belong to a country which grants reciprocal treatment; the corporation, besides, must have a majority of foreign shareholders.

The system of reciprocity was inaugurated by President Harding. Governments which allow free competition to American companies receive the like treatment.

The permits solicited by the Royal Dutch will therefore probably be refused, while those sought by Canadian companies, such as the Midland Oil, are much more likely to be granted; it will be enough that their British shareholders become Canadians. For Canada has always allowed the Standard Oil very great liberty on her territory. In April 1919, she even refused the association of interests proposed by the Shell, for fear of offending Washington. If ever war broke out between Great Britain and the United States, Canada would almost certainly proclaim her independence and break away from the British Empire.

The General Leasing Act may become a dangerous weapon in the hands of the Standard, and will perhaps be used by it to bring pressure on the Royal Dutch, which has several times refused its co-operation. Many Californian companies, subsidiaries of the Shell, have already been called upon to prove that their shareholders are really American citizens as required by Congress.

Thus, the threats uttered by Walter Teagle at the meeting of the American Petroleum Institute in 1920 are beginning to be put into execution: "If foreign Governments insist on carrying out their policy of nationalizing oil-bearing territory, if they insist on keeping petroleum deposits for their own future profit, at the same time demanding from the United States the satisfaction of their present needs, then there is no alternative for us but to take note of their attitude and, as a means of self-protection, to examine the methods of preserving our own oil for our own needs. Given their position in the world's commerce and the economic and financial weapons they have in their hands, the United States could certainly compel other countries to a redistribution of oil-bearing land, so as to obtain a part of those territories which these countries wish to keep for themselves."

"Great Britain," Senator Phelan pointed out, "holds one half the world's oil and produces only a quarter, while the United States, owning one-sixth, produce three-quarters. In the possible conflicts of to-morrow, she desires, by means of oil, not only to have all the chances of success on her own side, but also to take from her future rivals, although they may be her friends of to-day, these same chances of triumph. She tries deliberately to diminish the resources of America, which will be exhausted in eighteen years, as things go at present."

Shortly afterwards, in 1920, the former Secretary of the Interior, Mr. Franklin K. Lane, anxiously wondered whether Great Britain was acting in this way to prevent the growth of the American Navy. "Now, do such proceedings lead to peace or war? Is it admissible that Britain—not merely British capitalists, but the State or Government of Great Britain, that is, a political entity—should take possession of a market of such importance and keep the rest of the world out of it? It is surely obvious that if not only nationals, but States themselves, represented by Governments, take part in economic competition, and turn themselves into business houses or manufacturing firms, there is no hope of appeasing the conflicts which will constantly arise from commercial rivalry."

FOOTNOTES:

CHAPTER XVI

FROM WASHINGTON TO GENOA

The Struggle for the Oil-fields of Russia

A period of calm followed the Washington Conference. On his way to the United States, Sir John Cadman, the Grand Master of British Oil Policy, was lavish with protestations of peace and good will. He affirmed that British policy in no way aimed at eliminating Americans from the oil-bearing regions of the world, and he even declared himself in favour of co-operation between British and American capital in the exploitation of oil. "If," he added, "there are restrictions in certain Dominions and Colonies, it is because the home Government could not resist the demand for them. Besides, in Canada, the biggest company, the Imperial Oil, is American. In Trinidad there is a law excluding all but British companies from oil concessions upon Crown lands, but no restriction exists upon other lands in the colony. In Burma also the participation of foreign capital is forbidden, but this prohibition is of long standing; it goes back 35 or 40 years, and there is reason to believe that it may soon be repealed."

Sir John Cadman went so far as to declare that he categorically repudiated all governmental intervention in the oil question. In the mouth of one of the directors of the Anglo-Persian, this statement is somewhat amusing.

But undoubtedly, the British Government, feeling that it had gone too far, realized the necessity of dropping some ballast. During the Washington Conference, on the fringe of the main naval agreement, an oil truce was secretly negotiated. Britain even consented to allow the Standard Oil to establish itself in the five provinces of Northern Persia which had formerly been reserved for Russian interests. In order to obtain concessions form the Persian Government, in spite of the initial opposition of the Anglo-Persian, the Standard had not hesitated to make use of the American minister at Teheran.[37] The support which the representatives of Washington never refused has always been one of the principal causes of its triumphs.

But the struggle between Britain and the United States was not long in breaking out again with renewed intensity, this time for the conquest of the remaining oil lands, now escheat, from the Caucasus to the Urals and Turkestan. The Genoa Conference will be regarded by history, not so much as a great effort towards world peace, as a "Conference on Oil," at which the immense riches of the old Tsarist Empire were offered by Tchitcherin to the appetites of the Powers. I have developed this point in the preface to the Russian edition of this book, which has recently been translated under the direction of M. Melik-Noubaroff, formerly President of the Imperial Technical Commission of Baku and chief engineer of the Nobel Company: "Though Russia, which held first place in the world's production for a few years at the beginning of the twentieth century, has now dropped back to third place, the reserves contained in her soil still exceed 1,000 million cubic metres, almost equalling those of the United States and Alaska together (1,113 million cubic metres). Persia and Mesopotamia, Mexico itself, as well as the north of South America, rank after her. All other countries are far behind. The time will come, perhaps in less than twenty years (exceptional circumstances apart) in view of the terrific rate of consumption, when the reserves of the United States will be exhausted; then Russia will play a big part in the world." The developed areas throughout Russia, Siberia, and the Caucasus are much smaller than the extent of the proved deposits, which themselves are but a small fraction of those whose existence has been indicated with certainty by preliminary surveys. The oil resources of Russia represent alone one-sixth of the reserves of the world. Hence the greed and covetousness with which they were regarded at Genoa.

The question of oil is the primary political question of the present age, but in this Conference at which the future of Europe was to be enacted, France was the only nation which seemed not to notice the fact.

The Quai d'Orsay had not deigned to appoint a single oil expert to Genoa.[38] More than that, I am in a position to state that the only one of the French delegates who was acquainted with the oil question had received precise instructions before his departure to keep strictly aloof from all discussions about oil. It was, of course, manifestly impossible to expect to settle the question of Russia's oil at Genoa in the absence of any representative of the United States. The French delegation therefore held only a watching brief.

By this self-denial France at any rate earned the distinction of taking no part in the scandalous concession-hunting which went on behind the scenes at Genoa while the Soviet delegates were discussing the great principles of international morality with the official representatives of the Powers. Into this feverish atmosphere the news dropped like a bomb-shell that Krassin had signed a contract conferring upon the Royal Dutch-Shell a monopoly of the oil in the Caucasus. The news caused a great sensation, and immediately provoked solemn denials, which were more resounding than convincing. The few oil magnates and their satellites who were not already at Genoa hurried thither prepared for battle. The French Government at once dispatched M. Laurent Eynac.

The Cabinet, however, had decided that he alone should be attached to the delegation in an official capacity. And it was not until the afternoon of the day upon which it made this decision that it recognized the necessity of adding M. Pincan, the very able director of the Oil and Petrol Department of the Ministry of Commerce, on account of the fact that M. Eynac for over a year had been out of touch with his former colleagues.

The French delegation adopted the Belgian point of view upon the restitution of private property, and energetically defended French pre-War interests in Russian oil, which, in December 1920, represented a value of 200 million francs. A common policy was elaborated in conjunction with the principal Belgian oil companies, whose importance in the Caucasus equalled our own, with a view to the defence of rights acquired before and after the nationalization of mines and factories by the Soviets. In order to obtain absolute equality of treatment for French interests in the Caucasus, M. Laurent Eynac very pointedly called the British Government's attention to the stipulations of the San Remo Agreement. He relied upon Article 2 of the Agreement, based upon the principle of cordial co-operation and reciprocity in all countries where the oil interests of France and Britain can in practice be combined, and upon Article 6, which runs thus:

In the territories which belonged to the late Russian Empire the two Governments will give their joint support to their respective nationals in their joint efforts to obtain petroleum concessions and facilities to export and to arrange delivery of petroleum supplies.

The British Government, anxious not to obstruct the private negotiations of the Royal Dutch-Shell and the Soviets, got out of the difficulty very skilfully by giving to this latter clause a restricted interpretation. On May 15, 1922, in the House of Commons, Mr. Chamberlain went so far as to declare that Article 6 and the other analogous provisions of the San Remo Agreement would only become effective if French and British nationals decided jointly to acquire specific concessions. Nationals of a single country, like the British trusts, would therefore retain complete liberty of action.

If, in the light of these explanations, one appreciates the threat of monopoly contained in the insertion, at the instance of the British delegation, of Clause 7 in the Memorandum of May 2, 1922, stipulating that in cases where the exploitation of property formerly belonging to foreigners could be assured only by incorporating them in a general group, the preferential right to the restitution of the property should not apply, one is driven to wonder what in such circumstances has become of the cordial "Franco-British co-operation" spoken of in the San Remo preamble. Would it not be merely an empty formula?

For a long time past, the Royal Dutch-Shell had been striving to obtain a grasp of the oil deposits in Russia, and thus to realize, by arrangement with the British Government, its dream of world hegemony in oil. Its only reason for not amalgamating with the Anglo-Persian and the Burmah Oil at the beginning of 1922 was fear of American reprisals. The question was much debated, but after considerable hesitation Mr. Lloyd George refused to give his consent; so soon after the Naval Pact of Washington it would have caused something approaching a sensation in the United States and would have appeared intentionally provocative.

As soon as Britain had signed the trade agreement with Moscow, the Royal Dutch opened negotiations with the Soviet representatives, and it was not long before these relations bore fruit in the sale of 10,000 tons of oil to the Asiatic Petroleum, one of the Royal Dutch-Shell subsidiaries.

I may mention here that the signatories on behalf of the co-operatives of Russian producers were Krassin, Rakovsky, Mrs. Varvara Polovtsef, Victor Nogin, and Basil Krysin. The notorious agreement between the Shell and the Soviets, which agitated the Press of the whole world and produced a scandal which almost wrecked the Conference, was not concluded at Genoa; it was drafted in London during February in the following form:—

The Russian Soviet Government is prepared to give consideration to a proposal by which the sale of all oil products available for export from the various oil-fields of Russia would be placed in the hands of a syndicate formed upon the following basis:—

The initial capital will be provided by equal contributions from the Russian Government and the foreign group.

The management of the syndicate will have control of all sales and will be entrusted to a Council composed of an equal number of representatives of the Russian Government and the foreign group.

The syndicate will be responsible to the Russian Government for the most favourable sale of oil products possible. In order to derive the maximum advantage from such sale, the syndicate will provide or within an agreed period create the necessary distributive organization, which will entail a certain capital expenditure.

It is suggested that the capital thus required be raised by the issue of bonds bearing a fixed rate of interest.

Payment of the interest upon these bonds will be guaranteed by the foreign group.

The syndicate will receive, as remuneration for its activities, a certain commission upon all sales, which commission will be fixed upon a sliding scale according to the quantities sold.

For quantities not exceeding 100,000 tons 5 per cent. is suggested; for larger quantities a proportionate rate will be arranged by mutual agreement. Furthermore, it is understood that any surplus realized by the sale of Russian oil over and above the export price of the American market will belong entirely to the syndicate.

After meeting working expenses, the profits thus realized will be applied in the first place to the payment of the interest upon any bonds which the syndicate may issue, and the balance will be divided equally between the two parties to the syndicate, i.e., the Russian Government and the foreign group.

These arrangements will hold good for five years certain, after which period the Russian Government will have the right to redeem the bonds at the price of issue or upon such other terms as may be stipulated at the time of issue, and to terminate the agreement. The Russian Government, however, will be obliged to give one year's notice at the end of the fourth year if it desires to terminate the agreement. In default of such notice, the agreement will hold good for another period of five years.

It is understood that the Russian Government reserves the right at any time to sell oil products directly to foreign Governments, but such sales will in no case exceed 50 per cent. of the total quantity available for export in any year.

The success of the syndicate will depend entirely in the early stages upon transport facilities between the places where the stocks of oil products are available and the ports of embarkation. Unfortunately, at the present time these facilities are in some measure lacking, and with a view to remedying the situation, the foreign party to the syndicate will be required to invest at least £500,000 in the transport system. This sum, as well as all other sums mentioned below, will be guaranteed by the Russian Government, and in case of necessity will be secured upon the stocks of Russian oil.

This money will be used for the purchase of the necessary rolling stock, for the maintenance of pipe-lines, and, if required, for the installation of new pipe-lines for the various products.

Against the sums thus employed, transport bonds will be issued bearing interest at the rate of 8 per cent.; furthermore, these bonds will carry the right to a bonus, the amount of which will be determined by the quantity of oil products transported over and above a pre-arranged quantity.

The amount of this bonus will be fixed by mutual agreement, and will take the form of an agreed tax upon each pool of oil products transported in Russia over and above a pre-arranged quantity.

Payment of the interest upon these bonds will be guaranteed by the Russian Government, and in case of necessity will be secured upon the existing stocks of oil.

The transport organization thus formed by the rolling stock to be acquired and by that which is at present available will be under the management of a Council composed of an equal number of delegates of the Russian and the foreign group.

All rolling stock and everything belonging to this joint undertaking will be exempt from requisition or confiscation whether by the Central Government or by local authorities.

The Council of the undertaking will be free to appeal for qualified foreign workmen, and in general to administer and manage the business in the best interests of the enterprise and the objects it has in view.

Any additional capital which may be required will be provided by equal contributions from the Russian Government and the foreign group.

Such additional capital will be raised by the issue of bonds bearing interest at a rate to be fixed by mutual agreement at the time of issue, the Russian Government being responsible for the subscription of one-half of the issue and the foreign group for the subscription of the other half.

These bonds will carry the right to a bonus in the same way as the bonds mentioned above.

The activities of the Council of the joint undertaking will be subject to all laws and decrees of the Russian Socialist Federal Soviet Republic and to all regulations which may be in force.

Of all the employés of the syndicate in Russia, 50 per cent. only may be non-Russian.

If an agreement upon this basis is deemed possible, the foreign group will have the right to appoint representatives in Russia to examine conditions of transport, to take samples of existing stocks, etc.

After the expiry of ten years the Russian Government will be free to redeem the transport bonds at the price of issue or upon such other terms as may be stipulated at the time of issue.

It is clearly understood that these terms will provide for certain bonuses at the time of redemption to be calculated upon the average profits of the joint enterprise during the last two years of its operations.

The Russian Government will signify its intention to redeem these bonds by the end of the ninth year at latest.

I am aware that serious changes in this contract were contemplated by the two parties in the course of the negotiations. They were only to be introduced if Mr. Lloyd George succeeded in bringing about the de jure recognition of the Federal Soviet Republic. This agreement, which was duly initialled, but not signed, at Genoa, referred only to concessions for deposits not hitherto exploited. But the Soviet Government had given an oral promise to hand over to the English the fields which were already developed and which had been nationalized for the past four years. Moreover, during this winter, British groups, through Krassin as intermediary, had entered into relations with the former owners and had negotiated with them for the resumption of their concessions. The Bolshevik Government has always urged foreign Powers seeking to acquire a share of Russian oil to deal separately with the dispossessed owners in order to protect themselves against all possible claims in the future.

From the very beginning of 1922, the Royal Dutch spread a rumour in France that it was experiencing difficulties with the British Government and must rely upon the support of the French Government. This man[oe]uvre succeeded so well that, when the French representatives at Genoa were given precise information about the impending conclusion of the agreement between the Shell and the Soviets, they shrugged their shoulders and smiled contemptuously; the rivalry between the Royal Dutch and Great Britain was unquestionable. If the great trust obtained certain advantages, France would benefit; it was best to let it carry on. Their disillusionment was bitter.

Now the British Government, in conjunction with the Royal Dutch-Shell, has been seeking to obtain for itself the products of the oil wells of the Caucasus, not since 1922, but since 1919. The early negotiations proceeded slowly. Mr. Lloyd George had then but little confidence in the permanence of the Bolshevik régime. He did not even contemplate negotiations with its representatives. The financiers of the Royal Dutch-Shell approached only the most important of the dispossessed Russian oil magnates. On July 27, 1920, one of the most powerful subsidiaries of the trust, the Bataafsche Petroleum, bought a large quantity of the shares in Caucasian companies owned by MM. Mantasheff, Lianosoff and Pitoieff. For the celebrated Russian actor, Pitoieff, is also a great oil proprietor. The purchase price was fixed at £11,042,000, of which £645,000 was paid in cash. The balance was to be paid by instalments, but the Russian proprietors have not received even the first.

Events had moved quickly. Mr. Lloyd George had developed a sudden and violent sympathy with the Government of Moscow. He now saw in it a saviour who would secure for dormant British industry the work of reconstructing the immense devastated empire. He had decided to bestow upon it his official blessing, to obtain that of all Europe, and to approve its theories and practices, in particular nationalization. Henceforward, the Shell considered it had no further concern with the proprietors of the old régime. And Colonel Boyle, one of its most active agents, entered into relations with Krassin, who promised to reserve to the Royal Dutch-Shell the monopoly of the export of Russian oil.

Krassin promised everything he was asked, and allowed the contract to be drafted. But as soon as there was talk of signing it at Genoa, he gave the project such publicity that the general diplomatic hue-and-cry which resulted prevented its signature. It was the Soviets themselves which divulged their agreement with the Shell. They have no wish to place the greatest riches of Russia in the hands of a single people, and especially a people so successful and ambitious as the British. The British Government just failed to realize its greatest dream; the conquest of the remaining oil deposits throughout the world—a conquest which would have assured its supremacy in the future and would have made all other peoples its tributaries.

But, in spite of everything, I believe in the future of the British people, one of whose leaders was not afraid to say, twenty years before Germany had begun to dream of European hegemony: "I believe in this race, one of the greatest governing races the world has ever known, this Anglo-Saxon race, proud, tenacious, self-confident, resolute, which no climate and no vicissitude can corrupt, and which will infallibly be the predominant force in future history."

FOOTNOTES:

PART IV

FRANCE'S PART IN THE STRUGGLE BETWEEN GREAT BRITAIN AND THE UNITED STATES

CHAPTER XVII

THE CARTEL OF TEN

In this bitter struggle between Britain and the United States for dominion over the world's oil, what is France's position? France as yet possesses very little oil, although petroleum has been found in various parts of her colonial empire and that of Alsace has been restored to her; but on account of her political importance, she is a "second" who may decide the victory. Hence the efforts made by the two great Anglo-Saxon nations for her alliance.

After 1870, there was no free competition in petroleum in France. The industry fell into the hands of the great firms which, sheltered behind the customs barriers established by the National Assembly at Versailles immediately after the Commune, formed a cartel enjoying a veritable monopoly, and apportioning the different regions of France. These ten firms did not compete. They fixed their prices in agreement and shared among themselves the quantities to be sold. It would have been impossible for an eleventh to establish itself in France without their consent. In the original cartel of 1885 there were only three members; round these the other existing refineries grouped themselves in 1893. Thus the Cartel of Ten was formed:—

Fenaille et Despeaux. Désmarais frères. Fils de A. Deutsch. Compagnie Industrielle des Pétroles. Raffinerie du Midi. Société Lille-Bonnières et Colombes (L.B.C.). Paix et Cie. G. Lesieur et ses fils. Compagnie Générale des Pétroles. Raffinerie de Pétrole du Nord.

These were the ten firms which, protected by the ridiculously high customs tariff fixed on July 8, 1871, had monopolized for their own profit the sale of the petroleum brought in by the then all-powerful Standard. With a total capital not exceeding 100 million francs, they made for the ten of them a profit of 50 million francs a year.[39] Thus, France paid more for her oil than any other country in Europe. Protected by its agreement with the trusts by which it guaranteed them the monopoly of its supplies, the cartel did not exert itself. We had only 400 tank-wagons, 54 ill-organized depots, and 17 refineries. The process of refining in France has never employed more than 300 to 400 men, of whom just over a third were specialists.[40] Their fleet of tankers in 1914 comprised only 14 small boats of 3,000 to 6,000 tons, of which only three sailed under the French flag. The others were under the British flag "in order to profit by the less burdensome shipping regulations." It was a veritable humiliation for France, when, at the beginning of the War, she had to beg Great Britain to be good enough to return them. Britain had requisitioned them. If the two countries had not been allied, France would have been disarmed from the very first day! Eight of these ships were sunk during the War, and when the cartel was asked to build new ones it refused, "so as not to give offence" to the great trusts.

Except for Charles Paix, who made a disastrous attempt to the south of Cheliff in Algeria, none of the "oil men" tried to discover petroleum in France or her colonial empire, and so to endow the country with a real independent petroleum industry. They much preferred, with the aid of the Standard, to draw large profits without running any risks. A remark of M. Deutsch de la Meurthe on this subject has become famous: "The greatest misfortune that could happen to us would be to discover petroleum deposits." M. Barthe well remarked in the course of a comprehensive indictment: "Our oil magnates have been neither producers nor transporters of oil, and they have not even continued to be refiners." For, since the law of 1893, which lowered the import duty from 20 francs to 9 francs a metric quintal[41] for crude oil, and from 32 francs to 13.50 francs for refined oil, thus reducing the incredible difference of 120 francs a ton between the two, the Cartel of Ten has arranged with the Standard Oil to bring into France refined American oil with 7 or 8 per cent. of residual impurities, which it passes as crude oil, so frustrating the fiscal duty and realizing enormous gains. The understanding with the Standard was changed about 1904 to a close dependence; the Ten became nothing more than Rockefeller's representatives in France, his oil importers. The Standard fixed the quantities to be sold by each one and made them sign an undertaking to sell at the prices fixed by it at the beginning of each week. In the old refineries of Paris, Rouen, Bordeaux, etc., the agents of the Standard carried on a simple process of distillation, a mere pretence of refining, well-known under the name of "cracking." They imported a mixture of mineral spirit and petroleum, oil manufactured in America, a mixture which they had only to heat slightly in order to separate the volatile spirit (petrol) from the heavy constituents (petroleum oils). This fiction has always been admitted by the State officials. It has allowed really refined oils to come into the country as crude oil, paying the minimum duty. Millions have thus been lost by the State to the profit of a few privileged individuals.

Later on, when the cartel made an arrangement with André et Cie. that they should deliver Russian oil to it alone, the Standard wanted the agreement submitted to it for ratification, and laid down the condition that André et Cie. should only make deliveries in the proportions it decided upon.

Thus, the Standard was dominant in France up to the War, fixing prices and eliminating other importers. But, in spite of the lowering of the customs duties in 1893 they still remained so high that the Conseil Supérieur de Navigation Maritime, at its meeting of May 15, 1913, complained of the difficulties of procuring petroleum in France at "reasonable terms." Mazut, the price of which is very low, could not enter the country on account of the 9 francs duty, with which the legislature had burdened it without discriminating between various kinds of crude oil of greater or lesser value. In 1918, the world as a whole was consuming 30 million tons of mazut, France not one quintal. And her shipping was very much behind that of other nations with regard to the use of the Diesel engine. Very few of her vessels burned oil. "What absolutely prevents the fitting up of our ships" wrote the Under-Secretary of State for the Merchant Marine, in a letter to the Minister for Commerce on June 2, 1913, "is the exaggerated price of liquid fuel caused by the fiscal exactions." On July 21st, M. Charles Roux, president of the Comité Central des Armateurs, took steps to obtain a lowering of these tariffs. They were without result until 1919, the year in which M. Clemenceau got the Chamber to pass the law of August 7th, which lowered the import duties on mazut from 9 francs to 0.40 francs. At last the prohibitive customs barrier was broken down. The tax on coal was then 1.10 francs a ton. A ton of liquid fuel paid duties one hundred times as high (90 to 120 francs). From the fiscal point of view, this tax brought in nothing to the Treasury. It was so high that it prevented all importation. And thanks to that, also, France was left behind by all her rivals.

FOOTNOTES:

CHAPTER XVIII

THE PETROLEUM CONSORTIUM

At the beginning of the War, the French State possessed no reserves of petrol or petroleum: a new example of the unpreparedness so often remarked!

The "refineries" disposed of a stock amounting at the end of July 1914, according to the Customs statistics, to:—

408,200 quintals of crude oil, 433,560 quintals of refined oil, 342,090 quintals of petrol.

To meet the earliest needs, these were requisitioned. But, from the month of September, this method was changed for that of contracts with the "Ten." The cartel undertook to meet the needs of France; it made itself responsible for purchases from abroad. The State was thus a mere customer enjoying the rights of priority over other customers.

The consumption was then unimportant. At the time of the first battle of the Marne, France had 22 squadrons of 6 aeroplanes (= 132), with engines of 80 or 100 horse-power; 110 motor-lorries and 50 tractors (= 160). The Germans had 70,000![42]

At the time of the battle of Champagne, France had 4,000 aeroplanes and 8,500 motor-lorries; that compelled her to increase her reserves of oil from 22,000 to 40,000 tons. But the crisis as regards supplies began in April 1916. Payments to foreign countries were more than could be met by the cartel, which, having just paid an account of a hundred million francs for purchases made by the State, could advance no more money. The position grew steadily worse and reached its culminating point after the United States came into the War in November 1917. The original little fleet of tankers quickly proved as inadequate as the size of the docks provided in our ports, which were intended for boats of 4,000 to 5,000 tons while the American tank-steamers were of 10,000 to 15,000 tons. On December 5, 1917, the Cartel of Ten had to confess its impotence and resign to the State a task which was too much for its powers. The stocks ran grave risk of becoming too completely exhausted on March 1, 1918. It was imperative "to effect a reorganization which history will record as one of the most substantial triumphs of the Entente at the decisive moment, and which resulted—thanks to the pressure on behalf of France which President Wilson put on the Standard—in doubling the figures of our importations of oil and petrol" (Report addressed to M. Clémentel, Minister of Commerce, in April 1918). Mr. Wilson, as soon as he received M. Clemenceau's moving appeal, summoned Bedford and W. Teagle to his room, and insisted that a certain number of their ships should be taken off their usual routes and sent to France. Eight days later, three magnificent tank-steamers entered a French port, bringing 30,000 tons of petrol. And since then, thanks to a new system of rotation of ships, France was enabled to receive annually a quantity which, finally, exceeded a million tons. (Each boat was made to do one extra voyage a year; that gave a gain of 160,000 tons.) Consumption steadily increased; the requirements at the front rose, at certain times, to 1,800 tons a day. France consumed:—

Tons. Tons.

1914 (first half-year: peace) 200,000 } 476,000

1914 (second half-year: war) 276,000 }

1915 457,000

1916 640,000

1917 610,000

1918 1,000,000

87-1/2 per cent. of this oil was supplied by the American continent, the United States, Mexico, Trinidad, South America, etc.; 12-1/2 per cent. only by the Old World. That is why, in case of a new war, it would be impossible for any Power whatever to gain the victory if its tank-steamers could be barred from access to the New World.

During the month of October 1918, alone, the consumption of the Allied armies was:—

French39,000 tons

American 20,000 tons

British 32,000 tons

The Shell could scarcely cope with the task of supplying the British Army. But for the help of the Royal Dutch and the Standard Oil, "we should have had to cease hostilities to our disadvantage, in the fifth month of the War."[43]

After the Cartel of Ten was obliged to confess its impotence in the midst of a crisis which nearly lost the War, its work was limited to putting into good condition the products bought and stored by the State. Its rôle had become singularly unimportant when the Minister of Commerce transformed it into a consortium.

The petroleum consortium was born of the necessities of war, like the consortium of cotton and the consortium of oils. In the midst of these great conflicts, powerful economic associations, controlled by the State, can alone save national manufactures and commerce from perishing for want of materials, and can supply the enormous requirements created by the war. When, through fear of other countries, the French Republic took the form of an absolute monarchy, it inaugurated, under the guise of a protective State socialism, a system of intense exploitation of the nation's economic forces and of its products, which were monopolized, seized, or requisitioned. The Government was, in fact, reduced to a society of consortiums, which, each in its own domain, were the sole buyers and distributors of wealth. There was the Comité des forges to deal with metallurgy; there was another for oil.

Because of the difficulties of importation, manual labour, raw materials, freightage, and exchange, the simple liberty of the merchant or the isolated manufacturer is no more than an empty word, perhaps even a dangerous illusion.

The system of the consortium was urged by the United State Government. Having created centralized organizations for its exports, it desired that these organizations should come into contact, not with scattered merchants, but with the Allied States themselves. The important inter-allied agreements made in Paris and London, in November 1916 and December 1917, on the initiative of M. Clémentel, confirmed the principle of these industrial and commercial syndicates, financially responsible to the State, which becomes a direct buyer. Besides, the French State was not anxious to see the incredible profits which were going to result from the doubling of oil imports—imports of a value of a thousand million francs yearly—fall into the hands of the Cartel of Ten. It therefore imposed upon it, on March 29, 1918, after three months of inquiries and hesitations, a curious contract.

The State reserved to itself the monopoly of the purchase and import of oils, and sold them to a special organization (the consortium), constituted under the form of a limited company with a capital of thirty million francs, of which half was to be paid up immediately. This company undertook delivery of the commodity, reimbursed the State for its expenditure (cost, insurance, freight), itself met the charges for unloading and storage, and re-sold the oil to the ten members of the cartel at prices fixed for each variety by the Ministers of Commerce and Supply. The distributive trade within the country was left free. Each of the Ten subscribed towards the formation of the capital in the following proportions:—

Nominal Capital subscribed. Paid-up Capital. Percentage.

Francs Francs Francs

Fenaille et Despeaux 4,725,000 2,362,500 15.75

Désmarais frères 4,725,000 2,362,500 15.75

Fils de A. Deutsch 4,725,000 2,362,500 15.75

Cie. Industrielle des Pétroles 3,861,000 1,930,500 12.87

Raffinerie du Midi 3,504,000 1,752,000 11.68

Société L.B.C. 2,526,000 1,263,000 8.42

Paix et Compagnie 2,238,000 1,119,000 7.46

Cie. Générale des Pétroles 1,428,000 714,000 4.76

Lesieur et fils 1,284,000 642,000 4.28

Raffinerie du Nord 984,000 492,000 3.20

30,000,000 15,000,000 —

As the consortium was founded in the general interest, they agreed to take interest at the rate of only 6 per cent. on the capital they had provided. Beyond that, all profits were to go to the State. They were fairly high, for on July 1, 1919, they amounted to 67 million francs.

This organization constituted a first monopoly of importation by the State, under the financial management of the consortium, which arranged for the reception and storage of the products and their sale to refiners. Under the system which prevailed before that of the consortium, the Ten pocketed the supplementary profits arising from buying and transport. These were retained by the consortium for the benefit of the community.

The oil magnates will never forgive the State for interfering with their affairs. According to M. Henry Bérenger, "although the State left to the cartel a large share in the management and the profits—more than 100 million francs—the latter never consented with a good grace to the intervention of their country's Government in matters concerning oil. They never freely accepted the principle of collaboration with the public authorities." In August, 1918, at the height of Marshal Foch's offensive, a grave crisis arose from the extraordinary particularism of the oil magnates. For fear of losing an additional profit of 15 centimes a litre, they refused to pool their cans, as the French High Command required of them. The reports sent in at this time by General Head-quarters are categorical in tone. The resistance from private interests became so strong that the Government decided, in the critical days of the great advance, to create a Commissioner-General for Petrol with full executive powers to subordinate rigorously all private commerce in oil to the requirements of the public safety.

M. André Tardieu, the High Commissioner at Washington, was sometimes also greatly impeded in his negotiations by the Ten. From the end of 1917, he made direct purchases of oil from the Standard Oil, the Atlantic Refining, and the Texas Oil, because of the difficulties that had been made for him by the rivalry and man[oe]uvring which he denounced in his telegrams. While the French Government was trying to buy at £5, the oil dealers were offering £7 10s. Their clumsy and inopportune intervention furnished the Standard Oil in many cases with an instrument of pressure.[44]

FOOTNOTES:

CHAPTER XIX

HOW GREAT BRITAIN WON OVER FRANCE TO HER SIDE IN THE STRUGGLE WITH THE UNITED STATES

I. Activities of the Royal Dutch and the Anglo-Persian.

On the morrow of the Armistice, on November 21, 1918, Lord Curzon gathered together all the members of the Inter-Allied Petroleum Conference at a great banquet, and there uttered the famous saying: "The Allies floated to victory on a wave of oil." M. Henry Bérenger, the French Commissioner for Petrol, proposed to retain the great inter-allied organizations for the distribution of oil, wheat, coal, etc. The Standard Oil refused. Besides, Sir John Cadman, Sir Marcus Samuel and Lord Curzon were not sorry to regain their freedom. They had only one idea—to bring to a successful conclusion their vast scheme, followed up for ten years with such admirable tenacity, in every country of the globe, for the acquisition of oil-bearing territories.

France, in compensation for the great damage she had suffered during the War, was to receive important rights for the development of concessions in Galicia, Rumania, and Turkey, formerly belonging to Germany. The great thing was to keep out the American rival. To attain this end, as M. Delaisi pointed out, the task was rather complex. Several things were necessary:—

1. To negotiate directly with the Quai d'Orsay in order to get the principle admitted of an exclusive association between France and Great Britain, for the exploitation of French concessions throughout the world;

2. To create Franco-British companies to carry out this agreement;

3. To establish a State monopoly in France, which, under pressure of diplomatic conventions, would be bound to keep off American competitors.

On January 21, 1919, although the War was over, the mandate of the Petrol Commission was extended for another six months. The State retained the monopoly of buying oil and the system of the consortium. That prevented our oil-men from working hand in hand with the Standard Oil as they did before the War.

Then, on January 30th, M. Clemenceau granted diplomatic powers to M. Henry Bérenger. He immediately sent commissions of inquiry into every country in which France might have petroleum interests, to London, Warsaw, Bukarest, Constantinople, Baku, and Mesopotamia. M. Bérenger was all in favour of a great scheme for founding an inter-allied company in which the French State, bringing as its share the German concessions which would be ceded to her by the treaty of peace, should enter into association with Great Britain and the Royal Dutch. On March 7th, the Walter Long-Bérenger agreement was signed, fixing the broad outlines of a common oil policy in Mesopotamia, Rumania, and eventually in Galicia and Russia. It was a preliminary sketch of the San Remo Agreement. It remained only to prepare for its realization. Eighteen days later, without losing any time, the Royal Dutch offered to co-operate in the plans of the French Government in matters concerning the management and exploitation of the various oil interests which might be reserved to France as a consequence of the treaty of peace. It proposed, moreover, to place at France's disposal "all its world-wide technical, industrial, commercial and financial organization, not only in the countries mentioned, but also in all other countries" in which she might need its co-operation. And it offered to supply France by priority, in time of peace as in time of war.

M. Clemenceau welcomed the proposal. In order not to offend Parliament and public opinion, which was tending more and more in favour of a national oil policy, the Royal Dutch entered into partnership with one of the great commercial banks, the Union Parisienne, in order to create with its concurrence companies of which the nationality, if not the capital, should be French.

In this manner were created the Société pour l'Exploitation des Pétroles in July, and the Société Maritime des Pétroles in August 1919, the former with a capital of 20 million francs, and the latter of 10 million francs. In the first of these companies five out of nine of the directors bear names well-known in the Royal Dutch: Deterding, Gulbenkian (the Talleyrand of oil), Colijn, who at one time nearly succeeded Deterding and who has been Minister of War in the Netherlands, Cohen, Jonckheer, Hugo. France has only a minority on the Board of this "French" company, for M. Deutsch de la Meurthe, whose influence brought over the Cartel of Ten from the side of the Standard to that of the Royal Dutch, is little more than the mouthpiece of London and The Hague. The Royal Dutch, besides, subscribed 60 per cent. of the capital of the Société pour l'Exploitation des Pétroles, though it now holds only 49 per cent. In the Société Maritime des Pétroles, the disproportion is still greater; out of seven directors, two only are French, and have played an important part in French politics during the last few years. It is to them, in particular, and to the skill of Gulbenkian, who conducted the negotiations very cleverly, that the Royal Dutch owes its triumph in French official circles.[45]

But the British Government is not content with these two companies founded by the Royal Dutch, (The second is so little French that 19,600 out of the 20,000 shares of its capital belong to the Anglo-Dutch trust, and 400 only have been subscribed by the two French members of its council.) In spite of the opposition of Parliament, it authorized the Anglo-Persian to found a company much more important than the other two put together, a company with a capital of 227 million, the Société des Huiles de Pétrole. This Franco-British Anglo-Persian was created by one of the most powerful personalities of the financial world in Eastern, Southern, and Western Europe,[46] to whom Great Britain owed the policy she was then following against the Turkish Empire.[47]

Through the agency of Sir Basil Zaharoff, who is interested both in the Société Navale de l'Ouest and in the Banque de la Seine, and holds 70 per cent. of the capital of Vickers, this British firm undertook to construct immediately, giving preference over the other trusts, the whole of the tank-boats, of 10,000 tons on an average, destined to ensure to the new "French" company the monopoly of the transport of oil for the French market. France will depend for its future supplies, in great part, on this Franco-British Anglo-Persian. Its stations will be found on all her coasts, as well as in her African possessions. The Société Générale des Huiles de Pétrole will erect vast reservoirs at Dunkirk, Le Havre, Rouen, Saint-Nazaire, La Pallice, Bordeaux, Marseilles, Bizerta, Algiers, Oran, Casablanca, and Dakar (Senegal).

As the United States will probably still have the advantage for another dozen years as regards oil supplies—for it is not very likely that they will exhaust their reserves so soon as 1927, as the Smithsonian Institute pretends—, the new enterprise set out to gain immediate control in the matter of tank-steamers.

Everything being thus prepared in the banks and chancelleries, it only remained to drive out the Standard Oil from the French market and to establish firmly the monopoly of purchase and importation granted provisionally to the Petrol Commission. On May 6, 1919, M. Henry Bérenger announced in the Chamber the profits which remained for the State under the consortium system—profits not paid into the Treasury, but devoted to a special object, the development of the petroleum industry; and on June 17th, M. Klotz brought forward a Bill to establish this monopoly permanently.

The Standard, which, since the Armistice, had been impatiently waiting for the time when restrictions upon trade in France would be removed, no longer had any illusions about the desire of the Commission to expel it from that country. Although the Standard had resumed its freedom from the conclusion of hostilities, it had none the less continued its supplies of oil to France, and knowing the Treasury was in difficulties, had accepted 5 per cent. bonds in payment. Now, in self-defence, it declared that it refused all credit.

The Oil Commission, in thus breaking free, had taken precautions against being caught unprovided. Three days after the rupture with the Standard, on November 25th, it obtained a credit of £2,000,000 from the Royal Dutch, which was increased on January 5, 1920, to £5,000,000. The Standard Oil was ejected and the great Franco-British trust established in its place, thanks to this long-date contract.

But shortly after the fall of the Clemenceau Cabinet, this success came near to being undone. No new commissioner had been appointed in place of Henry Bérenger: a high official of the Exchequer was given the title of Director-General. The politics of oil, when we needed a real Petroleum Department, as in Britain, were reduced to the common level of current events.

For more than a month (February-March, 1920), what remained of the Petrol Commission was left at a loose end, only indispensable deliveries were made. A state of anarchy ruled. The stocks, which had, until then, been laid in four months in advance, fell to almost nothing. The Standard Oil took advantage of this to regain its footing.

In spite of its promises, the Royal Dutch did not succeed in delivering sufficient quantities of oil. By March 13, 1920, the reserves had fallen below the danger-line, to less than 75,000 tons. The Director-General, anxious about supplies, decided to resort to the Americans. And as the powers of the Petrol Commission had been legally extinct since April 26th, and its provisional monopoly at an end since April 21st, he established the system of authorizing imports, and granted licences to several companies which had made contracts with the Standard Oil. Would the Standard Oil succeed in re-entering France?

It was not given the time, for the San Remo Agreement had just been signed (April 24, 1920). A few days later, the French Government resumed control of oil, and M. Laurent Eynac, the new Commissioner, taking the view that what had happened during the interregnum had no legal existence, hastened to annul the licences to import granted to the Standard.

The great American trust found once more in France, as it had so often found since the War in other parts of the world, the "closed door."

II. Diplomatic Negotiations

"The diplomatic history of the Franco-British negotiations concerning Mosul will, when it is made known, constitute the most eloquent document upon British policy towards France."[48] According to the agreements of 1916, Mosul was in the French zone of influence in Arabia. Great Britain began by obtaining the cession of our territorial rights, as recognized by this treaty. The French Government gave way to her desires in spite of the opposition of its Foreign Minister. But when, later on, we demanded in compensation that 50 per cent. of the oil of Mosul should be reserved for us, Great Britain produced at the propitious moment the difficulty, unsuspected by our negotiators, of the Turkish Petroleum, a company which she had opportunely created in collaboration with the Royal Dutch a few months before the declaration of War in 1914. Now the Turkish Petroleum had obtained from the Turkish Government the grant of all the naphtha of the vilayets that we lost in renouncing the Sykes-Picot Agreement of 1916. So, having abandoned Mosul, all we were to receive in exchange was the oil with which Britain consented, as a special favour, to supply us.

"When one knows England well," wrote M. Le Page, with justice, "one is not surprised that, when, with the help of France she has driven out America from the territory she covets, she should strive to throw over her helper, having got rid of her rival."

The petroliferous basin, which extends from Persia to Mesopotamia, is one of the most extensive as yet discovered in the whole world. The great deposits reach as far as twenty miles to the north of Mosul. In the valley of the Naphat, the oil flows naturally into the river. At Hit, on the Euphrates, there are asphalt deposits which have long been exploited by the natives. And it is probable that this petroleum basin, which also includes Palestine,[49] continues through Syria right to the shores of the Mediterranean. Near Latakia (Laodice) there are asphalt beds, which the Latakia Oil, a British company, has been exploiting since 1915. On the eastern side of the Gulf of Alexandretta, the streams which flow down from Mount Alma bear traces of oil. Thus, it is not surprising that this region has aroused, and still arouses, so much covetousness among the Powers. As early as 1903, the Imperial Ottoman Bagdad Railway Company, the famous Bagdad Bahn, obtained the grant of the right of exclusive exploitation of all deposits found within a distance of fifty kilometres from its lines. Germany transferred this right to the Turkish Petroleum when the latter company was created. The capital of the Turkish Petroleum was, to begin with,

50 per cent. British; 25 per cent. German (Deutsche Bank); 25 per cent. Dutch (Royal Dutch).

Germany's share has been handed over to France by Great Britain in order to obtain her support in the struggle against the United States.

As the War broke out almost at once, the Turkish Petroleum had not time to begin the exploitation of the oils of Mesopotamia. After the new King of Iraq has decided definitely what is to happen to them, it will take nearly five years to develop them fully.

In 1914, an Anglo-German agreement had expressly recognized the rights of France in Asia Minor. These rights, moreover, were respected in all essentials in the agreements between France, Russia, and Great Britain, in 1915 and 1916, for the partition of Asia Minor. This latter, in March 1916, defined French and British zones and French and British spheres of influence. "In a letter of May 15th," wrote the reporter of the Public Works Commission, "Sir Edward Grey requested that, in the zone which was to become French under the Sykes-Picot Agreement, it should be understood that all existing concessions, navigation rights, and the rights and privileges of all British religious, educational and medical establishments would be maintained."

In a letter of the same date, M. Cambon agreed. By these means France was tricked, for doubtless M. Cambon was not aware at the time that, from June 26, 1914, a British firm, the Turkish Petroleum Company, had obtained from the Turkish Minister of Finance, Saïd Halim, the concession of all rights over oil discovered or to be discovered in the vilayets of Mosul, Basra, and Bagdad.[50] Now, it was just from these three vilayets that the oil in the French zone came; so much so that, by the interpretation of the Franco-British Agreement of May, 1916, France was completely ousted from the oil production of Mesopotamia.

Thanks to Henry Bérenger, a new agreement was concluded between him and Mr. Walter Long in March and April, 1919. Henry Bérenger recalled the agreement made before 1914 between Saïd Halim and the Bagdad Bahn, the railway company which had passed into French and British hands since the German defeat. The Turkish Petroleum Company was subject to this agreement, because the railway passed through its oil-fields. Rights had been reserved for the Germans over half the production of Mesopotamia. "Thus, France obtained 25 per cent. as her half-share of the German rights." Unfortunately, this agreement met with a certain opposition at the Quai d'Orsay. It was held up, and M. Clemenceau did not sign it, "because, on February 8, 1919, after we had ceded Mosul and Palestine at the request of Mr. Lloyd George upon the threefold condition of the oil agreement—whole-hearted British support of the French point of view in the event of American objections—and finally the exact fulfilment of the 1916 treaty concerning the frontiers of Syria, Mosul excepted, our British friends presented to us a map which deprived us of one-third of Syria in addition."

Such was the explanation given to the Chamber by André Tardieu! A certainty was sacrificed for a possibility. M. Henry Bérenger strove to have the treaty revived, and on December 21st signed a new contract with Sir Hamar Greenwood, the British Minister in charge of oil questions, very similar to the Long-Bérenger Agreement, except in the matter of native interests. This time, however, Lloyd George, not considering it advantageous enough to Britain, refused to sign it.

Such was the situation when France went to the Conference of San Remo.

The San Remo Agreement

It was not merely the oil deposits of Mesopotamia that France, in return for a lowly and subordinate participation in British control, was abandoning to Britain—as they would have had the Chamber believe at the time of the noisy debate upon Mosul—but the whole of French oil interests, present and future, whether in the colonies or abroad. The first article of the agreement which Mr. Lloyd George and the real "Grand Master" of British oil policy, Sir John Cadman, presented for signature, stipulated, it is true, that "this memorandum relates to the following States or countries: Rumania, Asia Minor, territories of the old Russian Empire, Galicia, French Colonies," and that the agreement might be extended to other countries by mutual consent; but, of British territories, only "British Crown Colonies" were opened to French co-operation, and then only "so far as existing regulations allow." Thus, London kept an easy method of evasion in reserve. Now, though the British Empire counts many "Dominions," there is not nowadays a large number of "Crown Colonies." The former German Colonies themselves, with one exception, have been handed over to the Commonwealth of Australia, or to New Zealand, or to the Union of South Africa. Thus, apart from former German East Africa and a small strip of the Cameroons which France ceded to Nigeria, these will not be open to "Franco-British co-operation."

There is but a single country in which the San Remo Agreement has provided equal treatment for France and Britain, at least in theory; that country is Rumania.

Rumania is the State in which French interests were the most important; they would be increased still more by the spoils of the Deutsche Bank and the Disconto-Gesellschaft. Accordingly, the two Governments pledged themselves to support each other in acquiring concessions which belonged to sequestrated companies, such as the Steaua Romana, Concordia, and Vega, and in obtaining fresh concessions. "All shares belonging to former enemy concessions which can be secured and all other advantages derived from these negotiations shall be divided, 50 per cent. to British interests and 50 per cent. to French interests. It is understood that in the company or companies to be formed to undertake the management and the exploitation of the said shares, concessions, and other advantages, the two countries shall have the same proportion of 50 per cent. in all capital subscribed, as well as in representatives on the board, and voting power."

This equality was not a favour, for the French capital invested in Rumanian oil was at least as important as that of Britain.

In the territories of the old Russian Empire, where French interests are much less important than British interests, an equal distribution is not provided for: it would have been to the advantage of France. But it is stated that the two Governments will give their "joint support" to those of their nationals who make "joint efforts" to obtain concessions, and to export and deliver oil. Now, at the present moment, such efforts are being made by the Royal Dutch-Shell alone, which is even going to the length of proposing to the Soviet Government to restore the oil industry of Russia, if it is granted extra-territoriality for its concessions.

In Mesopotamia, "the British Government undertake to grant to the French Government 25 per cent. of the net output" if the Mesopotamian oil-fields are developed by Government action. If a private company is used, the British Government will place at the disposal of the French Government a share of 25 per cent. in such company. Thus, in the one case France will be simply a consumer of oil, or in the other she will be both a producer and a consumer. The negotiators took care to have inserted that "the price to be paid for such participation shall be no more than that paid by any of the other participants." They remembered the price at which British coal had been sold them!

"It is also understood that the said petroleum company shall be under permanent British control." Should a private company be constituted, "the native Government or other native interests shall be allowed, if they so desire, to participate up to a maximum of 20 per cent. of the share capital of the said company, the French contributing one-half of the first 10 per cent. of such native participation." With this system, as M. Delaisi has observed, France would subscribe a third of the capital, upon which condition she would have a right to a quarter of the oil produced.

If Britain consented to give France this share of the Mesopotamian oil, when, according to the document which Sir Edward Grey had got M. Paul Cambon to sign on May 15, 1915, she was under no obligation to give anything at all—the more so because France had given up Mosul without previously laying down any conditions about the oil[51]—it was because the present carried with it as a counterpart privileges and exemptions granted by France to the Anglo-Persian, which will have access, if it so desires, to the Mediterranean by pipe-lines across Syria. It will even be able to build railways, refineries, and reservoirs there, and France is pledged to guarantee the security of its installations in her zone without levying any tolls. No export or transit dues are to be levied upon the oil which it sends through French ports.

Finally, while the British Government only opens its "Crown Colonies" to French penetration, and in these restricts the favour to the "territories of the Crown,"[52] with the further condition that the concessions in question are not already the subject of negotiations initiated by private interests, the French Government threw open the whole of its great colonial empire, and undertook to facilitate the acquisition of concessions by "any Franco-British group or groups of good standing." It simply called attention to the fact that Parliament had resolved that, in companies formed for the exploitation of colonial deposits, French interests should be represented in the proportion of 67 per cent. But the French Parliament was under an illusion: in order to have control of a business, it is not sufficient to hold one-half or three-quarters of the shares. Every one knows that, in France, shareholders rarely attend the general meetings which appoint the directors. Still less will they undertake the journey to London, where the head office will almost always be located. They do not even go to The Hague; this explains why they have no influence in the Royal Dutch, although they hold more than half its capital. The last increase of capital of the Royal Dutch was voted by forty-four persons, representing 218 votes. People did not allow their private arrangements to be disturbed by an event which might have notable results upon the world-future of this trust: not one share in 1,110 was represented.

However, Britain did not wait till the San Remo Agreement was signed before grasping the oil-fields of the French colonial empire: she gained possession of them while the War was being fought!

FOOTNOTES:

CHAPTER XX

GREAT BRITAIN AND THE OIL-FIELDS OF THE FRENCH COLONIAL EMPIRE

As early as July 10, 1914, M. Clémentel had appealed to the French Government to prevent foreign Powers from laying their hands upon the oil deposits of Northern Africa. "At a time when Britain is pursuing in Persia a policy which is well known to you, and when oil concessions are, at bottom, the chief cause of the troubles in Mexico," he exclaimed, "the French Government cannot permit its representatives in Algeria, or in Morocco, to give deposits of oil to all comers."

The Government paid no attention to this, for, two years later, Lord Cowdray (Pearson) had obtained a concession of 730,000 hectares for prospecting, and 101,000 for immediate exploitation. These extensive territories were bounded on the east by the railway from Ténès to Orléansville, on the south by the railway from Orléansville to Relizane and thence to Saint-Lucien, on the west by the lines from Saint-Lucien to Saint-Barbe and from Trelat to Oran, and on the north by the sea between Oran and Ténès. And when, on November 9, 1916, M. Ernest Outrey submitted to the Chamber documents demonstrating how the French Government had proceeded to hand over the oil riches of Algeria without consulting Parliament, M. Marcel Sembat, the Minister for Public Works, deemed the following reply a complete justification:

"If you are dealing with lands where the presence of oil is doubtful and where, according to technical experts, you would have to spend many millions upon prospecting, and if a company says to you 'Here are our guarantees; we have competent technicians, and we are prepared, under Government control, to spend four million francs upon prospecting,' what are you to do?"

When the Pearson firm addressed its request for a concession to the French Government, on January 18, 1915, the Minister, in forwarding it to the Governor of Algeria, did not hesitate to write that "the question would have to be submitted to Parliament."[53]

But he was not long in changing his opinion, and, in order to dispense with Parliament, it was decided to deal with the request "by decree enacted by the Council of State."[54]

On August 18, 1916, before any final decision had been taken upon the matter, M. Marcel Sembat instructed the Governor of Algeria "to give the petitioning company every facility for the sale of oil obtained as a result of the investigations which it may undertake." And, on October 11th, M. Lutaud forwarded to him the following letter from the Prefect of Oran, which pointed out an ingenious method of evading the law upon concessions:

"In conclusion, M. Dussert (Engineer-in-Chief for Mines at Algiers) proposes, if the Administration should decide not to present a Bill to Parliament, a different solution from that contemplated by the Minister for Public Works. He suggests that an immense mining concession, covering the whole of Dahra, the Bel-Hacel range, and the forest of Mouley-Smaïl, should be granted to Algeria, leaving the colony, from the date of this concession, to give the oil company a three years' lease, renewable for two years, which could be made permanent as soon as the company had selected the lands which it wished to retain."

There followed a report by M. Dussert upon the petition: "This petition is formulated upon entirely abnormal conditions; the boundaries to which it would apply would enclose an area fifteen times as great as the concessions which are usually granted."

What the English desired above everything was to get a grip on these vast lands so as to keep off their American rivals, should important sources of oil be found there later on. The production of oil in Algeria is still insignificant, though it increased almost tenfold between 1914 and 1917. Henceforward, the majority of companies operating there, the Société co-intéressée des Pétroles algériens, the Société algérienne des Pétroles de Tiliouanet, the Société d'Études, de Recherches et d'Exploitation des Pétroles en Algérie, are invariably British. Lord Murray has even been ingenious enough to have inserted in the articles of association of the last-mentioned company a clause which nullifies all the precautions taken by the legislature: two-thirds of the directors are to be French, as the law requires; the managing director is to be French; but "the Board may in addition by special resolution confer powers upon such persons as it deems fit and for such purpose or purposes as it may determine."[55] This little paragraph alone changes the whole aspect of these articles of association, which, on the surface, appear to conform so closely with the requirements of Parliament. The company will entrust its interests to whomsoever it wishes.

But Britain has not been content with seizing the deposits in Algeria.[56] She has also installed herself in Madagascar. Since June, 1921, the Royal Dutch has been making a minute inspection of the fields of Sakalava.[57]

And if the hope to which M. Launay gave expression at the Academy of Sciences is realized, and oil is found in Indo-China, Laos, Tonkin, and Annam, the Royal Dutch-Shell will probably waste no time in gaining possession of deposits so near its base.

FOOTNOTES:

CHAPTER XXI

THE STANDARD AND FRANCE

On May 17, 1921, Mr. Hughes Wallace, the United States Ambassador, handed to France an official statement of his Government's grievances. He pointed out all the obstacles which American companies encountered in France, and asserted that British companies did not meet with the same difficulties.

Now, as Mr. Hughes Wallace observed, France needed ten times the quantity of mazut that she was getting, and many French factories were idle for want of fuel. Thus there was room in the French market for both British and American firms. Mr. Wallace therefore asked that they should be treated on an equal footing.

M. Laurent Eynac, under whom the Commissariat for Petrol had been re-established, without mentioning the Agreement which bound him to the British, replied by putting all the blame on the inevitable delays of official inquiries, which were "the same for everybody."

But a few days afterwards, Le Temps published an incomplete summary of the San Remo Agreement; it did not give the official text till July 25th.

The United States now understood the reasons for the attitude of silent hostility which France had adopted towards American oil companies. The San Remo Agreement aroused grave anxiety in Washington. President Harding displayed very clearly his intention not to tolerate such a policy. He made representations to the British and French Governments and protested against the exclusion of America from the Franco-British partition of the oil of Asia; he declared firmly that the British monopoly countersigned by France at San Remo was not to be tolerated, and that United States citizens were not to be ousted through the complacency of France towards the imperialism of London. The Washington Post wrote as follows: "Oil is indispensable to America, and American companies only provide inadequate quantities at excessive prices. The complacent arrangement between France and Britain for the partition of the oil resources of lands which are not in their possession is subject to revision upon the request of the United States, intent on the pursuit of their naval policy."

By subservience to British policy in the East, France was to reap the enmity of the United States. Its effects were soon felt, for, at the Brussels Conference in the following October, the "unofficial" delegate of the American Government declared that his country would not participate in any international loan for the capitalization of the German indemnity. This was one hope definitely lost, upon which France had long been relying. The same thing happened with the repayment of the French debt to the United States: France fondly hoped that the Americans would renounce what they had lent her during the War, just as Louis XVI renounced the millions which he advanced to their infant Republic, but when President Harding was sounded indirectly upon the subject, he returned a pointed refusal.

The French Government recognized somewhat tardily the mistakes which it had committed, and, when Mr. Bedford came to Paris in the autumn to found the Standard Franco-Américaine, it allowed M. Jules Cambon to accept the presidency. To get round the eviction order which has been served upon them in the Near East and the French colonial empire, the United States adopted the ingenious method of founding a French company, which will have just as good a right as the Société pour l'Exploitation des Pétroles to share in any concessions reserved to France. Abandoning the high-handed policy, which played the game of its opponents, the Standard, upon the advice of Walter Teagle, decided to employ the insinuating methods of the Anglo-Dutch trust. In France, the Royal Dutch relied upon the Banque de l'Union Parisienne, the Banque Bénard, the Banque Rothschild, and also, it is said, the Crédit Lyonnais. The Anglo-Persian had the support of the Banque Transatlantique and the Banque de la Seine. The Standard now allied itself with the Banque de Paris, the most powerful of the commercial banks in Europe.

51 per cent. of the capital of the Standard Franco-Américaine (20 million francs) was subscribed by the Banque de Paris et des Pays-Bas, and 49 per cent. by the American Trust. And in the constitution of the Board, the Standard acted much more prudently than the Royal Dutch: five out of eight directors were French.

Mr. Bedford, the actual head of the Standard Oil, went so far as to content himself with the vice-presidency, leaving the first place to a Frenchman.

The establishment of the Standard Franco-Américaine at this time was the more hazardous because M. Laurent Eynac, taking up the former Klotz-Bérenger program, was working for a definite State monopoly of the purchase and importation of oil. But the French market is of such importance to the Standard Oil in its struggle with the Royal Dutch that it preferred to take all the risks. "France," Mr. Bedford said, "on account of its geographical situation, is naturally a field for competition among all great companies." The Standard desires to have its place there. It proposes to resuscitate the refining industry, which has almost passed out of existence, and set up great warehouses in the ports to receive the crude oil; and it would even go to the length of installing special reservoirs of petrol for supplying motor vehicles in the neighbourhood of the municipal toll-houses.

Events have turned in its favour, for the idea of monopoly is to-day thoroughly discredited in France. M. Laurent Eynac was obliged hurriedly to withdraw his proposal owing to the commotion which it aroused. An extremely violent Press campaign broke out, and the political and diplomatic dangers of the San Remo Agreement became plain to every eye.

The present diplomatic situation is strangely like that of Fashoda. In 1905, France was at one of the turning-points of her history: she had to choose between the two Powers which had hitherto been her hereditary enemies. She decided to follow the British, and not the German, policy. Will she have to choose between the British policy and the American policy—between the two countries which helped her to emerge victorious from the great world conflict?

CHAPTER XXII

CONCLUSION

The World in 1923

The political independence of a people may sometimes be nothing but a sham. France, having neglected to obtain her share in the division of the world's oil, is to-day in a position of dependence upon Britain and America. If, to-morrow, she had to defend herself against a fresh attack, her tanks, her aeroplanes, her submarines, and the whole of her supply services could only function by consent of her Allies. Even with the first army in the world, France could be victorious only if Britain and the United States permitted.[58]

Already in time of peace, nations without oil were in a position of considerable inferiority, in view of the hundreds of uses to which oil is put in industry, and especially in the important sphere of the transport and distribution of commodities. There is no true independence for a people but that which is assured economically and financially. Military supremacy is only the happy result of proper efforts undertaken to attain it. During the War, such independence was to be desired for France even more than during peace: it would have avoided the heavy debts which she incurred to her Allies, and it would have enabled her to exploit herself the resources at home and in the colonies which she has been compelled to hand over to foreigners.

Before the War, France consumed more than 400,000 tons of oil a year. To-day, she requires 1,500,000, and the oil wells of Alsace, which the Treaty of Versailles has restored to her, produce only 60,000 tons, and Algeria 3,000-4,000 tons.[59] Thus, she is obliged to pay the foreigner nearly 2,000 million francs a year in order to obtain the oil which she lacks.

Nevertheless, there is almost certainly oil in France, in the Ain valley, the Jura Mountains, Auvergne, and the Landes; there is oil in the French possessions in Northern Africa and in Madagascar; there must be some in the Cameroons, in Indo-China, and in New Caledonia. Is it not abnormal that the West Indies and Guiana, when in British or American hands, produce oil, but when in French hands never yield anything? The same applies to Oceania. But there is no reason to be astonished at this; for, under the legislation which was in force since 1810, no Frenchman had any inducement to search for oil. This explains the epigram of one of the most important members of the French cartel, when he declared that "the greatest misfortune that could happen to an oil magnate in France would be to discover a spring of oil." Happily, on March 22, 1922, the Chamber altered this state of affairs by granting, as was suggested in the first edition of this book, the guarantees which are indispensable to prospectors. Till that year, the exploitation of deposits which a prospector had discovered might be conceded to any foreign company which came on the scene at the right moment to reap the fruits of his labours. Repayment of money laid out was highly problematical, for the local authorities used to grant this only to those responsible for the final investigations leading directly to the discovery of oil. Now, hunting for a "wild cat"—the American term for a boring—is a very risky operation, which entails considerable expenditure. In a protest submitted to the Ministry of Public Works by five Algerian colonists, who had carried out explorations and borings upon land for which a concession was now asked by a company of foreign origin, the colonists stated by affidavit that they had spent 870,000 francs upon 14 borings and 85 wells, of which seven alone were actually producing a few tons of petroleum. Even so, the proportion of seven successful wells out of 85 is rather high. O'Donnell, the president of the American Petroleum Institute, estimates that, out of every hundred borings made, 98 are unprofitable. But for fifty years the 2 per cent. which succeeded sufficed for the consumption of the world.

The policy of France in the Near East since the War has been simply one long suicide. Little by little, French diplomacy has abandoned everything that was promised by the agreements of London. While the San Remo Agreement marked the complete downfall of France in Asia, it considerably strengthened the position of Britain: not only does it recognize all rights acquired by Great Britain, including those which, as in Mesopotamia, rested upon a highly insecure foundation, but it gives British capitalists an important opening in French colonies which are still almost untouched, whereas the corresponding advantages which it confers upon France in some (not all) British colonies apply to territories where the most desirable fields are already being exploited.

France is paying for her past inertia.

If the Allies have to thank the two great trusts for enabling them to get their supplies of oil during the War, the latter in return have notably increased their power. The defeat of the Central Empires has brought about the ruin of their rival, the Europeanische Petroleum Union, and the destruction of the network of interests which Germany had succeeded in spreading over Galicia, Rumania, Russia, and Turkey.

The ambition of the Royal Dutch since it linked its fortunes with those of the British Empire knows no bounds. Its latest success at Djambi has now spurred it to ask the Netherlands Government for a monopoly of exploitation in all the Sunda Islands. It has almost reached the point of eliminating its American rival completely from the Far East.

The Standard retaliates, and sends prospectors wherever they are admitted—to Abyssinia (January 1921), Peru, Colombia, the Philippines, Bolivia. It has gained a footing in the Azores, and in July 1922 was trying in Ecuador to acquire control of the Lobitos from the Anglo-Ecuadorian. It is actively cultivating the Government of Czecho-Slovakia for the grant of exclusive rights of exploitation, and it has obtained from the Italian Government a concession for the oil deposits of San Saba, near Trieste. But the Chinese Government has refused the permanent agreement which it proposed.

Walter Teagle wishes the Standard, like the Royal Dutch-Shell, to become a producer of oil and not to content itself with the mere control of refining and distribution. But the time is long past when Rockefeller controlled 95 per cent. of the sales of oil in the United States. Although the Standard's capital has risen to $1,310,000,000 and the number of its subsidiaries to 62 it now refines only 49 per cent. of American oil. In the United States there are forty-four independent companies, representing a capital of two thousand million dollars, which carry on, not only the extraction, but also the transport, refining, and sale of oil. Still more serious, the Anglo-Dutch trust has succeeded in establishing itself on the territory of the Union itself; at a recent congress of the American Petroleum Institute, Walter Teagle showed that the Royal Dutch-Shell drew 43 per cent. of its total production from the United States. Be that as it may, the Standard, in America, is always regarded as the great national champion, upon which falls the task of fighting the Royal Dutch and the British Empire, which have laid plans for depriving the United States of their supremacy in oil. Who attacks the Standard attacks the Washington Government directly. And in Europe it still occupies a strong position through its various subsidiary companies. The struggle for oil is no longer a rivalry between great trusts; it is a struggle between nations.

FOOTNOTES:

BIBLIOGRAPHY

FRANCE

Agence Économique et Financière (1920-21).

Annales Franco-Helléniques (1920).

Bérenger, Henry, Le Pétrole et la France (1920). La Politique du Pétrole (1920).

Brésil (1920, "Le Pétrole en Amérique latine").

Capital (1914).

Courrier des Pétroles.

Delaisi, Francis, Oil: Its Influence on Politics (1920: English translation, 1922).

Économiste Européen (1906-21).

Épargne (1919).

Europe Nouvelle (1921).

Financial Bulletins of the Société Générale.

France Économique et Financière.

Illustration Économique et Financière.

Information (1906-21).

Le Page, L'Impérialisme du Pétrole (1921).

Messager de Paris (1919-20).

Moniteur Économique et Financier.

Mouvement Financier (1909).

Nouvelles Économiques et Financières.

Parliamentary publications: Reports presented for the Customs Commission by the Duc de la Trémoïlle (March 1919), and Senator Jean Morel (June 1919).

Report presented for the Finance Commission by M. Charles Leboucq (June 1920).

Documents submitted to the Sub-Committee on Oil of the Chamber of Deputies (1920).

Producteur (1921).

Revue des Deux Mondes (1st April, 1920, Contre-Amiral Degouy, "Le Pétrole et la Marine").

Revue Financière (1911-21).

Revue Politique et Parlementaire (August 1920).

Revue Universelle (October-December 1920).

Vie Financière (1914-21).

Vie Économique et Financière (1912).

GERMANY

Ludendorff, My Memoirs.

Potonie, Entstehung der Steinkohle, des Petroleum, u.s.w. (Berlin, 1910).

Vossische Zeitung (1913, "The Troubles in Mexico").

BELGIUM

Revue Belgo-Roumaine (1920, "Le Pétrole en Roumaine").

Revue Économique Internationale (1921).

GREAT BRITAIN

Daily Graphic (1913, "The Troubles in Mexico").

Daily Mail (1920).

Engineering and Mining Journal.

Financial News (1912-21).

Financial Times (1921).

Financier.

Lord Fisher's Letters to the Times (September 1919).

Manchester Guardian (1921).

Petroleum Review (1910-21).

Petroleum Times (1920).

UNITED STATES

Barnes, The Romance of Persian Oil. The Standard Oil Companies (1920).

Brooklyn Eagle (1920-21).

Nation (1921).

Petroleum Magazine (1921).

Public Ledger (Philadelphia).

Reports of the State Department for Foreign Affairs.

Hepburn Committee.

Inter-State Commerce Commission.

Director of the Bureau of Mines to the Secretary of State for the Interior.

Statistics of the Geological Survey.

Smithsonian Institute.

Independent Oil Producers' Agency.

American Chamber of Commerce in Paris.

National Bank of Commerce of New York.

Washington Post (1919-20).

World's Work (1920).

MEXICO

Boletin del Petroleo (1920-21).

Statistics of the Technical Commission on Petroleum of the Ministry of Commerce, Industry and Labour.

INDEX

Abyssinia, 248 Africa, 42, 245 Aktien Gesellschaft für Petroleum Industrie, 73, 74 Alaska, 40 Algeria, 234 Alleghanies, 28 Alpine Railways, 35 America, 66, 78, 239, 240 et passim American Navy, 19, 40 American Petroleum, 51 Anglo-American Oil Co., 51 Anglo-Egyptian Oil-fields, 74 Anglo-Persian Oil Co., 87, 93, 151 et passim Anglo-Saxon Petroleum, 62, 74 Anglo-Swedish Oil Co., 73, 74 Antipodes, 72 Apsheron, 26 Aquila Franco-Romana, 98 Argentine, 140, 143, 163 Arizona, 69 Asia, 72 Asia Minor, 225 Asiatic Petroleum Co., 74 Associated Oil, 80 Astra Romana, 75, 98 Australia, 42, 140 Austria, 35 Automobilism, 34 Aviation, 34 Azores, 72, 248 Bagdad, 26 Baku, 24, 29, 73 Banks Interested in Oil, 97, 98, 241, 242 Batavia, 85 Batavian Oil Company, 62, 74 Bibliography, 251 Bituminous Shale, 40 Black Sea, 72 Black Sea Co., 98 Bolivia, 248 Borneo, 61, 68, 75 Brazil, 144 British Controlled Oil-fields, 11, 143, 166 British Crown Colonies, 232 British Government, 89, 98, 133, 147, 152, 153, 157, 168 British Imperial Oil Co., 75 British Oil Policy, 158, 162, 182, 184, 215 British Pearson Syndicate, 80 British Petroleum Co., 75 British Tanker Co., 75 Burlington Investment Co., 76, 90, 130 Burmah Oil Co., 98, 131, 132 California, 68, 152 Californian Oil-fields, 76 Cape Verde Islands, 72 Carib Syndicate, 129 Caribbean Petroleum, 75 Carpathians, 98 Cartel of Ten, 52, 201, 208, 212 Caspian Sea, 72 Caucasus, 22, 45, 78, 97 Central Refining Co. of Pittsburg, 49 Ceram Oil Syndicate, 75 Ceram Petroleum, 75 China, 26, 65, 68, 92, 248 Coal, 12, 16, 17 Colby Note, 168 Colombia, 129, 152, 248 Colon Development Co., 90, 129 Colorado, 40, 69 Commercial and Industrial Companies of Caspian and Black Seas, 75 Companies Controlled by Royal Dutch, 73 Companies forming Standard Oil Trust, 49 Concordia Co., 229 Control of the Seas, 11, 18, 178 Costa Rica, 129, 144 Curaçao, 71 Curaçao Petroleum, 76 Czecho-Slovakia, 248 Dakota, 69 Danske Petroleum Altieselskabet, 51 Danube Navigation Co., 99 D'Arcy Exploration, 137 Deutsche Amerikanische Petroleum Gesellschaft, 51 Deutsche Bergin A.G., 73, 74 Deutsche Erdol Aktien Gesellschaft, 98 Deutsche Petroleum Verkaufs Gesellschaft, 98 Diesel Engine, 14, 34 Dissolution of Standard Oil, 54 Distribution of Oil in Europe, 42 Distribution of Oil in New World, 40 Doheny Interests, 45, 80 Dordesche Petroleum Company, 75 Dordesche Petroleum Industrie, 75 Dutch Indies, 13, 77 Eagle Oil Transport, 76 East Indies, 152 Ecuador, 144 Egypt, 42, 152 Empire Refining Company, 49 Erdol Industrie Anlagen Gesellschaft, 103 Erdol und Kohle Veränderung Aktien Gesellschaft, 73, 74 Europeanische Petroleum Union, 79 Exhaustion of Oil-fields, 176 Far East, 65, 66, 80 Financial Groups, 78 Galicia, 51, 78 Galician Companies, 99 General Asphalt Company, 71, 76 General Leasing Act, 180, 181 Genoa Conference, 185 German Battleships, 19 German Submarines, 15 Grosny Sundja Oil-fields, 75 Hague Conference, 93 Home Light Oil Company, 75 Hungarian National Petroleum Co., 139 Hungary, 137 Imperial Oil Co., 184 Increase in Consumption of Oil, 33, 34 India, 90, 152 Inter-Allied Petroleum Conference, 107, 153 Internal Combustion Engine, 14, 15 International Oil Company, 51 Italian Company for the Import of Oil, 75 Java, 63, 80 Jugo-Slav Petroleum, 77 Jugo-Slavia, 73 Keystone Refining Company, 49 Konzern Group, 99 Kotoku Oil-fields Syndicate, 76 La Corona, 76 Latakia Oil, 224 Lianosoff, 72, 76 Limanowa, 98 Lobitos, 248 Louisiana, 70, 152 Mantasheff, 72, 75, 197 Market-price of Oil, 36 Mazut, 14, 16, 37, 112 Mazut Company, 75 Mesopotamia, 158, 168, 230 Mexican Eagle, 22, 71, 76, 121, 151 Mexico, 29, 30, 32, 70, 81, 113, 114, 115, 125, 143 Mineral Rights, 162 Moebi Hid, 75 Monopoly in Oil, 98, etc. Monroe Doctrine, 129 Montana, 69 Moreni, Region of, 30 Mormons, 141 Mosul, 10, 26, 223, 224 Motor-traction, 38 National Transit Company, 49 Nederlandsche Indische Tanks Troomboat, 75 Nevada, 69 New Mexico, 69 New Russian Standard Company, 72 New Shibaïeff Petroleum Corporation, 75, 88 New Zealand, 42, 141 Nobel Properties, 73, etc. Norsk Encelska Mineralojeanie Colaget, 75 North Caucasian, 75 Oceania, 42 Oil as Fuel, 13, 17, 19 Oil Borings, 21, etc. Oil Lamp, Invention of, 28 Oil Policy, 9 Oil Springs, 21, etc. Oil Union of Oklahoma, 80 Oklahoma, 80, 152, etc. Orleans Refining Company, 76 Ownership of Land and Minerals, 116, 129 Ozark Pipe-Line Corporation, 77 Palestine, 161, 179 Panama Canal, 70, 71, 130, 144 Panama Canal Storage Co., 76 Panuco, 70 Persia, 133, 152 Peru, 156, 248 Philippines, 248 Photogen, 77 Poland, 45 Polk Report, 163 Producers' Associated Oil Company, 50 Protective Tariff, 89, etc. Railways, 35 Royal Dutch, 45, 68, 77 Royal Dutch-Shell, 42, 59, 63, 73, 81, 84, 130, 147, 151 Roxana Petroleum Company, 69, 76 Roxana Petroleum Corporation, 77 Roxana Petroleum Maatschappij, 76 Rumania, 30, 45, 78, 102, 152, 229, etc. Russia, 29, 30, 152, 186, 230 Revolution of 1905, 30 Bolshevik Revolution, 13 Russia, Soviets, 73, 157 Agreement between Shell and Soviets, 191 Russian Standard, 75 Salt Water in Oil Wells, 20, 122 San Remo Agreement, 10, 165, 169, 228, 239 Sandstone, 23 Shell Co. of California, 76 Shell Group, 167 Shell Marketing Co., 75 Shell Transport & Trading Co., 35, 61, 74 Sherman Anti-Trust Law, 56 Simplex Refining Co., 76 Sinclair Oil Co., 45 Societa Italo-Americana per Petrollo, 51 Société Bnito, 75 Société Générale des Huiles de Pétrole, 137 Société Maritime des Pétroles, 73, 77, 218 Société Navale de l'Ouest, 137, 219 Société pour l'Exploitation des Pétroles, 74, 218 Société pour le Vente du Pétrole, 51 Spain, 74 Standard Franco-Américaine, 241 Standard Oil Co., 9, 11", 42, 45, 57, 65, 77, 86, 92, 130, 174, 215, 221, 239 et passim Standard Oil Trust, 48 Steaua Romana, 99, 140 Submarines, 15, 104, 154 Suez Canal, 72 Sumatra, 63 Sumatra Palembang, 75 Sunda Islands, 59, 248 Swenska Petroleum Altiebolage, 51 Tampico, 70 Tampico-Tanuco Petroleum, 76 Tank Steamers, 155, 209 Tei-Koku (Japanese), 140 Telegram from Clemenceau to Wilson, 104 Texas, 69 Tierra del Fuego, 40 Treaty of Brest Litovsk, 103 Treaty of Bukarest, 103 Trinidad, 144, 152 Trusts, 79 Tsatouroff, 72, 76 Turkey, 45 Turkish Petroleum, 76, 98, 99, 140, 223, etc. Union Oil of Delaware, 77 United British Oil-fields of Trinidad, 76 United British Refineries, 76 United States, 9, 18, 29, 30, 32, 34, 38,45 et passim United States Pipe-Line Co., 50 Ural Caspian Co., 75 Utah, 40, 69 Vacuum Oil, 51 Vega Co., 229 Venezuela, 70, 71, 90, 144, 152 Venezuelan Concessions Co., 76 Vereinigte Benzinwerke, 75 Virginia, 70 Volley Pipe-Line Co., 76 Wages of Coolies, 13 War of 1914-1918, 12, 33, 101, 159, 210, etc. Washington Conference, 184, 185, etc. World-consumption of Oil, 39, etc. World-production of Coal, 36, etc. World-production of Oil, 32, etc. W.V. Oil Co., 76