362.115 St 21/358: Telegram
The Secretary of State to the Ambassador in Great Britain (Kellogg)
398. Your telegram 432, October 21. The Department did not expect favorable action from Bradbury as it understands he is inclined to raise technical objections. You may consider it advisable to bring the matter to the attention of the Foreign Office shortly after the new government is formed.
Even if the attempted transfer of voting stock in the D.A.P.G. by the Standard Oil Company could be considered valid, it still owned securities of the subsidiary totaling nearly five times the value of the voting shares. Included in the securities it held were share warrants to over twice the number and value of the voting shares which were of exactly the same nature as the latter, except that they carried no voting right. Obviously, this voting right has no bearing upon the equitable or beneficial interest of the stockholder. The Department considers that the compromise suggested by the arbitrators is more than fair to the Reparation Commission and the interested Allied States, in view of this undisputed preponderant financial interest. It is believed that if the matter were referred to the umpire the Standard Oil might well expect to obtain a greater portion. In view of the equities in the case and because a settlement of the nature indicated appears clearly to come within the scope of the Tanker Agreement, and practically within the spirit of paragraph G, as indicated in Department’s 360 of October 14, the Department is of the opinion that you may be able to persuade the British Foreign Office to instruct the British representative on the Reparation Commission to approve of the compromise. This would obviate the delay and expense incident to the reference of the case to the umpire for decision.
The foregoing is to be read in connection with Department’s 368 of October 21.89 Take no action which you feel might weaken the strength of any representations you may make in regard to our [Page 170] participation in the Dawes Plan annuities.89a Department leaves the matter wholly to your discretion.