Papers Relating to the Foreign Relations of the United States, 1923, Volume I

875.6363/67

The Minister in Albania (Grant-Smith) to the Secretary of State

Tirana, March 5, 1923.
[Received March 26.]

No. 50

Sir: As reported in my telegram of the 2nd instant, No. 20, the purport of the Department’s instructions as contained in telegram of the 27th ultimo were communicated to the Albanian Minister for Foreign Affairs on that date.

The Italian Chargé d’Affaires expressed a preference for an identic note or joint verbal representations but, in harmony with my instructions, I pointed out the greater effect which would attend separate representations and hastened to comply with the Department’s wishes without delay. Occasion was taken to leave a memorandum with the Minister for Foreign Affairs, a copy of which is enclosed herewith, in order that he might be furnished with some tangible evidence of the attitude of the Government of the United States towards the granting of monopolies in Albania to foreigners.

It will be noticed that attention was called to the fact that after the contract with the Anglo-Persian Company had been signed American companies had been invited to submit proposals, and furthermore, that that company had had the advantage of submitting modifications in the light of the proposals made by competitors. This was done in order to offset the plea that the Cabinet was morally obligated to honor the signatures of their predecessors but which had already been submitted and subsequently withdrawn from the competent committee of the National Assembly.

Occasion was likewise taken to forestall a plea, employed by a British corporation which was vainly striving to preserve a monopoly in Hungary and with which they had inoculated the Hungarian officials, that since they had been the first in the field, they should, in the event of the rejection by the National Assembly of the British proposals, receive preferential treatment.

The Italian Chargé d’Affaires made representations on behalf of his Government on the 3rd instant and the French on the 4th. They had received instructions to consult their American colleague and be guided by his advice. I pointed out to them the advantages of leaving memoranda with the Minister for Foreign Affairs, who is somewhat absent minded, and furthermore the fact that their Governments having so much more at stake here in Albania than the United States, they could well make representations of a much stronger and more definite character. I hope to be able later to forward copies of their respective memoranda.

Both the Prime Minister and the Minister for Foreign Affairs have, on several occasions, indicated to me that they were anxious to find a way out of the dilemma in which they now find themselves and have apparently welcomed our intervention but too much weight has not been given to such intimations nor have the efforts of the Legation to bring about the desired result been diminished. In this connection it might be well to mention the fact that I have confined myself strictly to explaining to various officials of the Albanian Government and of the National Assembly the advantages which would accrue to their country by the adoption of the policy of the open door and the unfortunate results which would supervene in case various monopolies are given to foreigners. I have been most careful not to express disapproval of any nation nor have I asked pledge of any deputy or government official. Naturally, whenever the question of threats of loss of territory has been raised, I have taken pains to explain their emptiness and have maintained that they could not have received the approval of the British Foreign Office. Knowledge of such threats having been freely made by the official dragoman of the British Legation and by the lawyer in the employ of the Anglo-Persian Oil Company is spread throughout the country, according to a deputy who has just arrived from Koritza. And, as I have already reported, even the delegate of the League of Nations and his subordinate have lent themselves to this propaganda and the British Vice Consul, as I have been informed by a subordinate official at the Foreign Office, threatened the reimposition of the capitulations if the Albanians failed to comply with British demands. These facts are likewise a matter of general knowledge.

The Standard Oil Company’s representatives, there are now two here, Mr. E. S. Sheffield and Mr. Wm. S. Taylor recently arrived from Athens … are carrying on a vigorous propaganda among the deputies by means of leaflets and the publication of articles in the newspapers, small sheets which appear twice or thrice weekly in various towns. It is hardly necessary to assure the Department that no member of this Legation is any way connected with this work. Certain deputies have volunteered the information that the information thus conveyed is much appreciated and is exercising a considerable influence as opposed to the granting of monopolies.

I have [etc.]

U. Grant-Smith

[Enclosure—Memorandum]

The American Minister (Grant-Smith) to the Albanian Minister for Foreign Affairs (Evanghelli)

The American Minister called on the Minister for Foreign Affairs on the 2nd March and referred again to the decision of the Albanian Government to transmit to the National Assembly for action not only the original oil concession signed with the Anglo-Persian Oil Company by the competent Ministers of the Cabinet of M. Ilias Vrioni, but also certain modifications subsequently made after the submission and in the light of proposals made by American companies which, since the signature in 1921 of the contract with the Anglo-Persian Company, had been encouraged by the Albanian Government to prepare and submit bids for concessions for the development of the petroleum resources of Albania, which they had been led to believe would be granted on a purely competitive basis.

He referred especially to the terms of the said contract and subsequent modifications by which an exclusive right would be granted, in the event of ratification, for exploration throughout Albania during a certain period of time, and subsequent rights which would ensure to that company a practical monopoly of the petroleum resources of this country.

The American Minister stated that, in view of these facts he had been instructed to inform the Albanian Government that the Government of the United States of America expected that the question of granting oil concessions in Albania would be treated entirely on its merits; that an equal opportunity would be afforded to American companies for competition with the companies of any other country and that no concessions would be granted by the Albanian Government which were of a monopolistic character or of such a nature as to exclude American citizens from the possibility of participation.

Mr. Grant-Smith reiterated certain of the arguments, put forward at previous interviews bearing on this subject, with regard to the policy of the “open door” so persistently followed by the American Government, a policy, the maintenance of which, was of such high importance to the welfare and independence of weak nations, and the unfortunate effect that a step of the nature referred to, and now threatened, would undoubtedly have upon the future commercial and financial relations between Albania and the United States of America.

He also took occasion to mention to H. E. Monsieur Pandeli Evangelli that, in case the National Assembly happily declined to sanction the monopolistic concession now submitted to it, he felt authorized to say that his Government would not be prepared to accept the view, sometimes advanced in somewhat similar circumstances, that the fact that a given competitor had been the first in the field was a reason for according him certain preferential treatment.

[Tirana,] 2 March, 1923.