883.6363/22
The Chargé in Egypt (Winship) to the
Secretary of State
Cairo, September 30,
1926.
[Received November 1.]
No. 886Sir: I have the honor to report further, in
compliance to cabled instruction No. 17, of July 19, 1926, 5 p.m., that
the Minister for Foreign Affairs addressed a note to the Legation on
August 26, 1926, in reply to the two notes from the Legation dated June
8th and July 10th, (copies of the last mentioned notes were enclosed in
Despatch No. 855, dated Alexandria, July 20, 1926). A copy of the
original note from the Minister for Foreign Affairs is attached hereto
as enclosure No. 1, together with a translation thereof.
Since my return to Cairo I have conferred several times with the officers
of the Vacuum Oil Company and have received from them a “Memorandum on
the Use of Floating Storage in Alexandria Harbour” in which they answer
item by item the points raised by the Ministry for Foreign Affairs. Copy
of this memorandum is transmitted as enclosure No. 2.22
In the meantime the Vacuum Oil Company has raised another point regarding
irregularities in the application of petroleum regulations in Alexandria
which is outlined in the second memorandum, enclosure No. 3.22
From my short acquaintance with the case it would appear that there is a
discrimination against old established oil companies in Egypt, including
the Vacuum Oil Company, through the granting of special privileges and
immunities to small competing firms. Established concerns are held to a
strict observance of the Egyptian regulations regarding petroleum which
require that “vessels load and unload with all reasonable speed and
leave the harbour as soon as the work is completed or subject themselves
to a penalty” and expensive tanks must be maintained on land owned or
purchased, etc., while several small dealers are permitted to store oil
in floating barges in Alexandria harbour and fill their tank cars from
these barges direct.
These privileges make it possible for the smaller concerns to undersell
the established firms.
It is also pointed out that these floating barges are in such close
proximity to the tanks and warehouses of the Vacuum Oil Company that
they represent a menace to the safety of American property.
In view of the fact that Minister Howell is returning to Cairo within a
week I shall not take the matter up with the Foreign Office and have so
informed the Vacuum Oil Company.
I have [etc.]
[Page 575]
[Enclosure—Translation23]
The Egyptian Minister for Foreign Affairs
(Saroit)
to the American Chargé (Johnson)
Cairo, August 26,
1926.
No. 15.7/8 (3261)Mr. Chargé d’affaires: By Notes No. 356 of
June 8, and No. 361, of July 10, 1926, the Legation of the United
States of America has seen fit to call the attention of this
Ministry to a complaint formulated by the representatives of three
oil companies, including the “Vacuum Oil Company”, on the subject of
the authorization granted certain importers to establish floating
depots in the port of Alexandria, an authorization which had already
been the subject of a protest addressed to the Ministry of the
Interior. The representatives of these companies disclosed that they
had incurred great expense in the construction of reservoirs upon
land and in taking every possible precaution to prevent accidents
and that the establishment of these floating depots by importers
lacking experience not only caused them an inequitable injury but
constituted also a grave danger for the neighboring reservoirs as
well as a menace to public security.
This protest having been submitted to the careful examination of a
competent authority, I have the honor to impart to you the following
information:
The general question of the control of the trade in petroleum in
Egypt has recently been the object of a minute examination by a
committee, especially appointed for this purpose, which has gathered
together the views of the best experts whom the Government was in a
position to enlist. This committee has given special attention to
the question of floating depots. It has been established that the
introduction of these depots in Alexandria is due to the lack of
place on land itself for the establishment of new installations as
well as because of the extent of the existing installations and
because in awaiting the creation of a Petroleum Basin the use of
floating depots cannot be prevented without imposing a grave
restriction on trade and an injury to the general interests to the
port of Alexandria.
In recognizing that the use of floating barges should be considered
as provisional, the committee has arrived at the conviction that
they do not constitute in themselves a special danger.
For these reasons the competent authorities do not believe that the
establishment of floating barges injures the interests of the
companies in question or threatens the security of their
installations and this the more so because certain of them make use
of floating barges for the supplying of their reservoirs.
On the other hand the authorities have taken all necessary measures
for the control of these depots in the general interest.
Kindly accept [etc.]
