882.635 Neep/107
Memorandum of Conversation, by Mr. Henry S. Villard of the Division of Near Eastern Affairs
| Participants: | Mr. John M. Sias, Assistant Vice President of the United States Steel Corporation |
| Mr. Murray | |
| Mr. Alling | |
| Mr. Villard |
Mr. John M. Sias, Assistant Vice President of the United States Steel Corporation, called by appointment today to discuss the question of the iron ore deposits in Liberia. Mr. Sias said that at a conference [Page 805] in New York the night before, attended by Mr. Edward Stettinius, Chairman of the Board of Directors, and Mr. Ferris, President of the Steel Corporation, it had been decided to send two engineers to Liberia to make a reconnaissance of the area where the deposits were reported to have occurred, provided permission could be obtained from the Liberian Government. This survey, Mr. Sias stated, would be made without any commitment on the part of the Steel Corporation in respect to a possible contract or concession for extraction of the ore.
Mr. Sias asked to be advised as to the proper procedure in seeking permission from the Liberian Government for the two engineers to make this reconnaissance.
After some general discussion as to the present status of the concession, Mr. Sias observed that in his opinion the failure of the Neep interests to make available to President Barclay the requisite geological reports might be due to either of the following circumstances: (1) They had found the deposits to be much richer than anticipated and were unwilling to disclose that fact; or (2) they had stumbled upon important mineral deposits of another nature, which might explain the sudden departure for The Hague of their representative in Monrovia. It may be mentioned in this connection that, although President Barclay has been authorized by the Liberian Congress to sign the concession if, in his judgment, it is in the best interest of Liberia to do so, he has thus far refrained from such action because of the persistent evasion of the Neep representative in furnishing the Liberian Government with necessary information regarding the financial backing of his firm or with bona fide geological reports and samples.
Mr. Sias commented on the sample of iron ore which, Mr. Villard had told him, the Department had received from Liberia, but without any indication as to the locality from which it had been taken. He said that the fact that this was magnetite introduced an entirely new angle in the situation. Replying to a question from Mr. Alling, Mr. Sias said that one could tell very little from one sample, but that magnetite might be used for certain purposes as well as hematite.
Mr. Murray then said to Mr. Sias that, as he knew, the Department had made the information regarding the Liberian iron ore deposits available to other members of the industry besides United States Steel, which might result in interest being displayed in the matter by one or more additional concerns. Mr. Murray pointed out that there were apt to be complications when competing American interests entered the foreign field. He went on to describe what had occurred in Persia when two American companies had endeavored to obtain an oil concession from the Persian Government several years ago.29 [Page 806] Owing to the fact that the Department could not support one American concern to the exclusion of another, it had not been able to enter the lists and afford appropriate diplomatic support as it would have been in a position to do if there had been a single representative American interest at stake. One of the competing concerns, moreover, had effected a tieup with British interests which had brought with it British diplomatic assistance, whereas the Department was compelled to remain neutral and impartial throughout the negotiations. The result was that the Persians had played off one American concern against the other, the companies had fought each other to a standstill, and neither one obtained the concession.
Mr. Murray next related what had taken place in Iraq when oil reserves had been opened up in that territory after the War. Under British mandate, there had been a disposition at first to restrict the exploitation of petroleum to those nations who had ratified the Treaty of Versailles or were members of the League of Nations, but we had insisted on the principle of the open door and had obtained equality of opportunity for American concerns. Instead of competing one against the other, six interested American companies had formed a group known as the Near East Development Corporation, the members of which had entered the fields successfully and worked in harmony together to everyone’s satisfaction. More recently, Mr. Murray went on, two American companies had become attracted by new oil reserves near Basrah and had been advised by the American Minister Resident in Baghdad to pool their interests and thus avoid the dangers and uncertainties of competitive negotiations.
Mr. Murray then asked Mr. Sias what the attitude of his company might be if other steel interests in this country also deemed it desirable to investigate the possibilities in Liberia, especially if they wished to send out a party of engineers to make a survey.
Mr. Sias replied that in his personal opinion, the United States Steel Corporation would not be the least interested in joining forces with any other American steel concerns in any undertaking in Liberia. He said that the examples which Mr. Murray had cited were not relevant to the present instance, since they had to do with well-known, valuable deposits, whereas the information as to just what existed in Liberia was scanty and to a great extent still unconfirmed. Mr. Sias made it clear that he would recommend to the United States Steel Corporation a completely independent approach to the Liberian Government in this matter. He was confident that Mr. Stettinius would concur in this and said he would be very much surprised indeed if any other American steel company would be willing to entertain a suggestion of joint action either in making a reconnaissance or in exploiting the Liberian iron ore deposits.
[Page 807]Mr. Sias also stated that his company would request of the Liberian Government the exclusive right to explore for iron ore and related minerals, in the territory defined in the Neep concession. The manner in which he made this statement, however, indicated that if such an exclusive right could not be obtained, the Steel Corporation might be satisfied with something less.
In this connection Mr. Sias asked whether President Barclay could grant the right to an American company to make a reconnaissance when the area in question was covered by a concession that only lacked his signature to put it into effect. Mr. Sias was informed that this would, of course, be a matter for President Barclay to determine but that no legal obstacles seemed to be presented by the terms of the concession.
In respect to the procedure in approaching the Liberian Government, Mr. Murray suggested that the Steel Corporation might properly address a cablegram to President Barclay direct, phrased in courteous language, and setting forth exactly what was desired. Mr. Sias said he appreciated this suggestion and was grateful for the Department’s information and advice, since this was his company’s first venture in dealing with a foreign government. He added that he fully understood that the Department could take no other position in the matter of competing American concerns, but repeated that he would recommend to his principals that the United States Steel Corporation proceed quite independently of any other firms in an endeavor to obtain the exclusive exploratory rights. He indicated that he would have a cablegram drafted and that he would read it to Mr. Villard over the telephone in the hope of avoiding any diplomatic error in the context.