Papers of the Interdepartmental Conference on Middle Eastern Affairs [‎61r] (121/290)

in fixing royalties; that they were to have a 10 per cent, interest in
the share capital; that local capital would be given an opportunity
of subscribing; and that the administration could, if they desired,
regulate local prices. He was of opinion that local interests were
sufficiently safeguarded.
The India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. considered that the most efficient way to
develop the oil resources of the country was to entrust them to a
capable commercial organisation, and that the organisation chosen
for the purpose was the best that could be selected.
Sir John Cadman mentioned that Colonel Wilson, when he first
arrived in Paris, had had quite an erroneous idea of the nature of
the agreement. He had understood that the Mesopotamian
administration was being committed in some way to a course of
action on which he had not been consulted. This was not the case.
The object of the agreement was merely the formation of a company
to take up any concessions which the Mesopotamian administration
had at its disposal, and nothing m it prevented their making any
conditions they chose. If these conditions proved to be too onerous,
the company might decline to accept them, and the agreement would
fall through. The figure of 50,000,000Z. suggested by Colonel
Wilson for the value of the Mesopotamian oil was, in his opinion,
mere guess work. Sufficient information was not available to enable
a reliable estimate to be formed of the total value of the concession.
Mr. Bnrstow agreed that, so far as the Treasury were concerned,
no financial question was involved in the French agreement. Colonel
Wilson’s argument that the Mesopotamian administration would be
deprived of the only real security that they would he in a position
to offer for any loan which they might require in the near future,
would no longer apply in view jof their ability to levy royalties.
Mr. Kidston said that the agreement pre-supposed the validity
of the existing concessions to the Turkish Petroleum Company, and
that if they were not valid the whole agreement would fall to the
ground.
Mr. Walter Long said that the Petroleum Executive were under
the impression that they had succeeded in wording the agreement in
such a way that it did not pre-suppose the validity of existing
concessions. M‘ Berenger had pressed very hard for this validity
not to he called into question, but the Petroleum Executive had not
been able to agree. The final form of the agreement, which had
been redrafted many times, had been concurred in both by them
selves and M. Bero ger, and he was of opinion that it had been
made sufficiently clear that the whole arrangement w r as purely
conditional.
Mr. Kidston pointed out that the Americans might reasonably
object to a secret treaty having been made about Mesopotamian oil
while the question of the mandate for Mesopotamia was still
undecided.
Sir John Cadman thought that it would be a good enough
answer to the Americans to point out to them that we had at present
O'dy 2 per cent, interest in the oil interests of the world, while
America had G5 per cent., and that we were perfectly justified in
attempting to obtain a more reasonable share.
Mr. Walter Long said that when negotiations with M. Berenger
first commenced, Colonel Arthur Grenfell had come to him as
representing the Standard Oil Company—and also, according to
him, the American Government—and had asked if there was any
room for America to come into the agreement. There was little
doubt, therefore, that the Americans were well aware of what was
going on. It was most important for His Majesty’s Government