The International Petroleum Cartel, Staff Report to the Federal Trade Commission, released through Subcommittee on Monopoly of Select Committee on Small Business, U.S. Senate, 83d Cong., 2nd sess (Washington, DC, 1952), Chapter 3, "Development of Joint Control over Foreign Oil," pp. 37-46.


Part I of this report described the areas of world production and reserves and analyzed the extent of control of petroleum reserves, production, refining, transportation, and marketing. Part. II presents a more detailed analysis of the growth of concentration in the principal foreign producing areas--the Middle East and Venezuela. This concentration has been effected largely through the twin instruments of joint-ownership and crude-oil-supply contracts. The history and development of concentration in the Middle East, which is of particular interest because of its importance to future supply (and thus to future price and production behavior), is described in chapters IV, V, and VI. In chapter VII, an examination is made of the development of control in Venezuela, a country which will undoubtedly continue to be a principal source of supply to the world petroleum industry.

Before examining the development of concentration, however, it is important to describe briefly the forces which led the major oil companies to seek control of foreign petroleum reserves.

Prior to the early twenties the major oil companies tended to fall into one of two classes with respect to their policies concerning foreign reserves. On the one hand were the concerns which for many years had based their operations on the control of reserves and the prodiiction of crude oil. On the other hand were the firms which had achieved their prominence as refiners and distributors, owning few reserves and producing little crude.

As a striking example of the former type, Royal Dutch-Shell had based its growth primarily on control of reserves and production in the Dutch East Indies, where oil was discovered about 1890.1 In order to market its crude oil, it developed refineries, transportation, and marketing facilities, both where its surplus-producing reserves were located, and in importing countries which either had no crude oil or were deficit producers. Likewise, what is now the Anglo-Iranian Oil Co., Ltd., began in 1901 as a concession granted to William D'Arcy. Anglo-Iranian Oil Co. was formed in 1909 to acquire this concession, which was revised in 1933 to cover a total of 100,000 square miles.

The outstanding example of the latter type of concern is the Standard Oil Co. and its successors. When first incorporated in 1870, it was strictly a refining company, controlling oniy about 10 percent of the petroleum refining capacity of the United States arid operating altogether on crude oil purchased from others. In 1873, it first engaged in pipeline, gathering and transportation of crude bought from others. By 1879, it had increased its control of refining capacity to 90 percent of the total itt the United States. 2 In 1887, it had entered the field of production in a small way, with two subsidiaries classed as crude-oil producers. Thereafter its interest in all four functions of production. refining, transportation, and marketing increased, but the principal basis for its growth in both domestic and foreign markets was its control of transportation, refining, and marketing. In 1904, it produced no more than one-sixth of total United States crude-oil production, but refined and marketed through its own selling organization seven-eighths of all crude run through United States refineries. 3

Since the United States was the world's largest producer of crude and refined products for export at the turn of the century, Standard's dominance in domestic transportation, refining, and marketing also carried with it a dominant position in international trade in crude oil and its refined products. The company's ability to attain and maintain that position without extensive control of reserves or actual production was favored by the periodic discovery of new oil fields which kept domestic production at such high levels as to create a surplus for export throughout the first 35 years of the company's history. 4

Around the early twenties, however, an entirely new set of factors led the Standard Oil companies to reverse their traditional policy of disinterestedness in foreign reserves. These new factors may be summarized as follows:

Fear of an oil shortage in America.--The vital role of oil in a modern industrial economy had vividly been brought home to the American people by World War 1. Immediately thereafter, there developed a deep-seated fear that the United States was running out of oil. An oil industry source described the prevailing pessimism in the following words:

Fear of an oil shortage in the United States was uppermost as a factor in international relations after World War I. It was a hold-over fear from a narrow escape from scarcity in 1917-18 when in the midst of war. It. was fanned by what might have been an actual--although probably short-lived--shortage had the war, with its tremendous demands on American supplies, been prolonged into 1919 and.1920. That it grew into a case of national jitters is not wholly surprising in view of the fact that the military importance of oil in modern war had been demonstrated. Oil supply took on a vital national defense complexion. 5

This pessimistic point of view during 1918-24 was backed up by estimates, which at the time were regarded as expert. In October 1919, Dr. Van Manning Director of the United States Bureau of Mines, stated:

We thus see domestic oil fields unable to meet our home demands under present methods of utilization and manufacture. 6

In January 1920, Dr. George Otis Smith, Director of the United States Geological Survey, in commenting upon our oil supply stated:

The position of the United States in regard to oil can best be characterized as precarious. 7.

In May 1920, Dr. Smith said:

Americans will have to depend on foreign sources or use less oil, or perhaps both. 8

In 1920, David White, of the United States Geological Survey, stated:

On the whole, therefore, we must expect that, unless our consumption is checked, we shall by 1925 be dependent on foreign oil fields to the extent of 150,000,000 barrels and possibly as much as 200,000,000 of crude each year, except insofar as the situation may at that time, perhaps, be helped to a slieht extent by shale oil. Add to this probability that within 5 years--perhaps 3 years only--our domestic production will begin to fall off with increasing rapidity, due to the exhaustion of our reserves * * * 9

During the period 1919-22, imports of crude oil from Mexico had been large--equal to 22 percent of total United States consumption in 1921.10 But salt water began to appear in some Mexican wells, and by 1921 geologists were debating whether Mexican production was not "through." in commenting upon the Mexican situation, David White of the United States Geological Survey said:

A great slump in Mexican production * * * seems sooner or later inevitable.11

Thus there was not only alarm about the United States oil potential but also about our primary foreign source of supply. Lendling encouragement to these doubts were statements appearing in foreign publications describing the United States oil position. E. Mackay Edgar, in Sperling's Journal for September 1919, wrote:

The time * * * is, indeed, well in sight, when the United States * * * will be nearing the end of some of its available stocks of raw materials on which her industrial supremacy has been largely built * * * America is running through her stores of domestic oil and is obliged to look abroad for future reserves * * * 12

Again in 1921 Mr. Edgar stated:

* * * given a resumption of trade and the consequent demand for oil products in, at the most., a year or two, the world will be confronted with an oil shortage such as has never been experienced before * * * 13

High cost of purchasing private mineral rights in America.--In the United States, the law reserves to the owner of land the right to own, exploit, or dispose of minerals underlying the surface owned. Only where oil-bearing lands are part of the public domain is it possible to negotiate with the Government for large-scale territorial concessions. As oil-bearing lands which were part of the public domain became less and less important as a source of supply, it became necessary to lease or purchase private mineral rights on a large scale, and often at high cost, if large reserves were to be acquired and held for the future.

This economic factor was of importance not only because of the fear of a prospective oil shortage in the United States, but also because this meant that American oil would be at an increasing disadvantage in supplying foreign markets. These markets at that time were developing rapidly due to the growth of motor transportation and the use of petroleum products for power, light, heat, and other uses. Particularly important in foreign markets was the growth in demand for bunker oils, since, following the lead of the British Navy in 1912, much of the world's shipping fleets were being converted from coal to fuel oil as their source of power.

Discovery of foreign reserves.--After 1890, the discovery and development of new fields in foreign countries, such as those of Rumania, India, Dutch East Indies, and Iran, gave the concession owners,. chiefly British-Dutch interests, supplies of crude oil more advantageously located, freightwise, with respect to foreign consuming markets than the oil fields of the United States and Mexico. The economic advantages accruing to companies with widely distributed sources of supply, such as Royal Dutch-Shell,14 is obvious. American companies wishing to retain European and Asiatic markets for their products at costs comparable to those of other suppliers could do so only by obtaining foreign reserves for themselves.

Fear of foreign monopoly.--Concurrent with the fear of an oil shortage in the United States and with the development of these economic factors unfavorable to American oil companies interested in foreign markets, there was also developing a general fear of a foreign monopoly of all foreign oil resources. In 1920 and 1921, the United States Senate demanded an investigation of the restrictions imposed on American citizens by foreign countries in prospecting for petroleum and of the steps being taken to remove these restrictions. 15 From the resultant reports and investigations it was concluded that American interests were being systematically excluded from foreign oil fields. In May 1920 Senator Phelan of California introduced a bill under which a Government corporation would be established to develop oil resources in foreign countries. 16

The rapid expansion of Royal Dutch-Shell in the United States during 1919 and 1920 was pointed out as an illustration of the exploitation by a foreign company of American resources, while conserving reserves elsewhere. 17 A statement was circulated among American oil companies in August 1919, to the effect that the British Government had decided to use the Shell organization to develop the oil resources of the British Dominions.18 Resentment and indignation were heightened by such evidence of British dominance as this statement of E. Mackay Edgar in Sperling's Journal in 1919:

America is running through her stores of domestic oil and is forced to look abroad for future reserves. * * * The British position is impregnable. All the known oil fields, all the likely or probable oil fields outside of the United States itself, are in British hands or under British management or control, or financed by British capital. * * * To the tune of many million pounds a year, America before very long will have to purchase from British companies * * * a progressively increasing proportion of the oil she cannot do without and is no longer able to furnish from her own stores.19

Because of these factors, by the end of World War I nearly all of the important American oil companies were actively seeking foreign reserves. In this search, however, they were confronted in the Eastern Hemisphere with formidable obstacles, the most important ones being the national and colonial policies of Great Britain and the activities of British-Dutch oil companies which were, themselves, engaged in the search for foreign reserves. The British-Dutch companies were endeavoring to prevent the surrender of Empire reserves to the American "oil trust," while at the same time they were busily protecting a similar trust of their own. The national and colonial policies of other European countries were directed to similar objectives.

At least as early as 1902, Colonial Oil Co. of New Jersey, which prior to the dissolution was a subsidiary of the old Standard Oil Co. (New Jersey), applied to the Government of Burma for a license to prospect for oil. This application was refused. In the same year Anglo-American Oil Co., Ltd., a British subsidiary of Standard Oil Co. of New Jersey, was likewise refused a license to prospect for oil in India with the explanation that--

It is not desired by the Government of India to introduce any of the American oil companies, or their subsidiary companies, into India. * * * 20

Later, in 1905, applications of Standard Oil Co. (New York)--at this time also a subsidiary of the old Standard Oil Co. (New Jersey)--for permission to erect storage and refining facilities in India to be supplied by purchases of crude oil from Indian producers, were likewise denied. 21 Again, in 1917, a representative of Standard Oil Co. (New York) obtained an option to purchase or lease land and mineral rights from private owners in Assam; their effort to prospect for oil, however, was blocked by the Indian Government, acting in accordance with the "cardinal principle" that--

The licensees shall be and remain British or state subjects or a company of British or state subjects under British or state control.22

As a result a single British company, the Burmah Oil Co. (partly owned by Anglo-Persian Oil Co. of which the British Government was part owner) was given a monopoly in the production of crude oil in British India. The British marketing interests in India also had become associated with the Dutch interests in the Far East, through the Royal Dutch-Shell merger of 1907, with the result that preference both as to production and marketing was reserved to British and Dutch associated interests. 23

The same principle appears to have beeti strictly applied prior to 1920 in certain other areas subject to British control, such as Canada and Australia, and in Crown lands arid lands alienated by the Crown for agricultural purposes in Trinidad. In still other areas controlled by the British, similar restrictions were applied in varying dcgrees. 24

Restrictive policies of the same general type were followed by the Netherlands, France, and otlie.r countries. in the Netherlands East Indies, where Standard Oil Co. (New Jersey) acquired certain prospecting rights under an oil mining law prior to 1920, these rights had been vested in Nederlandsche Koloniale Petroleum Maatschappij (Netherlands Colonial Petroleum Co.) a subsidiary of Standard Oil Co. (New Jersey). Standard of New Jersey stated in 1922 that. expansion of its interests in the Far East was blocked--.

* * * through the refusal of the Government of the Dutch East Indies to grant prospecting licenses to the N. K. P. M. [Nederlandsche Koloniale Petroleum Mij] or to grant mining concessions except in cases where the N. K. P. M. had a right to such concessions under the old mining law which provided that discovery of a mineral under a prospecting license gave the right to a concession. 25

In Rumania and Russia, in which two other important foreign reserves had been developed prior to World War I, American and other foreign interests, including the British-Dutch "Shell" combination, acquired concessions prior to World War I. The Russian oil industry was nationalized and foreign interests were expropriated following the revolution in 1918. In Rumania, prior to 1918, portions of government oil lands were leased for private operations by both Rumanian and foreign capitalists. Most of this leasing occurred prior to 1909. In 1918, large land areas were expropriated from both Rumanian and foreign owners, and surface rights were resold to peasants, with the Government retaining the subsoil rights. This expropriation applied particularly to lands declared to be oil bearing, but not yet worked. Other portions of govermnent lands, which were being worked, continued to be operated by both foreign and Rumanian private capital. In Poland, the only other country having important crude production in 1920, undeveloped lands were owned by the Government and exploration and exploitation were strictly supervised by the Government. 26

In Greece, the Anglo-Persian Oil Co. obtained an exclusive concession of all petroleum rights in eastern and western Macedonia for an exploration period of 5 years, with an option for a 50-year exploration concession in some areas. 27 Thus British interests obtained exclusive rights to oil that might be discovered in Macedonia.

In Persia, the Anglo-Persian Oil Co., Ltd., obtained concessions through its subsidiary, North-Persian Oil Co., Ltd., under which it claimed control of a territory of 500,000 square miles containing the most promising oil-bearing lands of Persia. Persian production, developed by the British largely to support the oil-burning British vessels during World War I, amounted to 16,673,000 barrels of crude in 1921. 28 The British Government participated in this development directly through its part ownership of Anglo-Persian Oil Co., Ltd. In southern Persia, also, Anglo-Persian Oil Co., Ltd., held a 60-year concession granted in 1901 to W. K. D'Arcy. Control of the northern Persian concessions, however, was rendered insecure following World War I by the claim of the Persian Government that the grant was invalid. 29 Iraq was not yet an important producer and the Bahrein Island, Saudi Arabia, Kuwait, and Qatar fields had not vet been discovered. 30

Because of these national and colonial policies, therefore, attempts by American companies to obtain crude oil concessions in Asia had been largely unsuccessful, and, in 1920, the holdings of these companies were negligible in both Europe and Asia. In the foreign countries of the Western Hemisphere, however, similar political and private barriers did not exist, and in the early 1920's American companies became actively interested in oil concessions in Venezuela, Colombia, and Peru.

In 1920 there were no strong American oil interests in Latin America except in Mexico, which, however, was regarded as a declining source of supply. 31 The most important interests in Venezuela at this time were held by Royal Dutch-Shell, which previously had acquired control of the concessions held by subsidiaries of the General Asphalt Co. 32 It was on Shell's properties in the Maracaibo Basin that the first important Venezuelan oil field discoveries were made in December 1922 and in 1923.

While most of the oil interests in South America, except. for those held by Shell, were small and undeveloped in 1920, a number of more important American companies became active in this area in the early 1920's. There were ito political or private barriers to the entry of American oil companies in the Latin-American countries comparable to those in the Eastern Hemisphere. By 1932, however, two American companies--Standard Oil Co. (New Jersey) and Gulf Oil Corp.--had emerged as dominant forces in the South American oil industry, owning, together with Shell, practically all of South American production and most of the promising concession areas. These two companies built up their holdings by purchasing or merging with other Venezuelan interests, large and small, or by long-term leases of their properties.

Jersey Standard acquired its first South American interests in 1920, when its Canadian subsidiary, Imperial Oil Co., Ltd., organized the International Oil Co., Ltd., which took over an independent company of the same name, operating in Peru, and the Tropical Oil Co., operating in Colombia. 33 In 1921, Jersey Standard concluded a contract, with the Maracaibo Oil Exploration Co., whereby Standard was to manage and develop a large part of its properties in the Maracaibo Basin for a two-thirds undivided interest in them. 34 In the following year, Jersey Standard entered into management contracts with British Controlled Oilflelds, Ltd., and a subsidiary of that company, the latter companies to have a royalty interest in the oil produced. In 1928, Jersey Standard merged its interests with those of the Creole Syndicate, which owned important concessions acquired on its own account and through the purchase of four independent companies. Some of Creole's important concessions in the Maracaibo Basin were being developed under contract with the Gulf Oil Corp., and, despite the change in their ownership, Gulf has continued to manage these properties to this day. 35 Jersey Standard rounded out its Venezuelan holdings through the purchase in 1932 of the foreign properties of the Pan American Petroleum & Transport Co., a subsidiary of Standard Oil Co. (Indiana). These properties included the Lago Petroleum Co. and its affiliated and subsidiary companies, owning large concessions on the northeast shore of Lake Maracaibo, where the richest oil fields of Venezuela subsequently developed large installations and a refinery at Aruba in the Dutch West Indies, and ships and other transportation equipment. 36 Jersey Standard thus acquired the largest oil interest in Venezuela, except for itself, Gulf, and Shell.

Gulf Oil Corp. similarly built up its holdings largely by acquisitions of independent companies. In 1923, 1925, and 1929, for example, the South American Gulf Oil Co. bought concessions in the Maracaibo Basin from the Maracaibo Oil Exploration Co. for cash plus a royalty interest. 37 The Venezuela Gulf Oil Co. in 1924 purchased concessions from the Andes Petroleum Co. 38 and from the Venezuelan Petroleum Co., Ltd.,39 the seller in both cases retaining royalty interests in the properties. In 1925, Gulf entered into the management contract with the Creole Syndicate mentioned above and in 1926 Gulf leased under option a large acreage from the Venezuelan Seaboard Oil Co., Inc.40 All of these properties and interests acquired by Gulf were in the Maracaibo Basin.

In short, practically all of Venezuela's production and its most promising concessions came to be held by Royal Dutch-Shell, the first important oil interest in Venezuela, and by two American companies, Jersey Standard and Gulf, which had built up their holdings by purchase, merger, and lease of the outstanding independent companies.

In the Eastern Hemisphere, the major oil companies, American and foreign, turned their interests to the Middle East after 1920 in the effort to satisfy their increasing needs for foreign reserves. This area not only gave promise of a treasure of oil, but it was also one where political and private barriers did not appear to be insuperable. Concessions in this area were granted after 1920 for large areas, including in a number of cases the entire area of a country, the concession holder generally being a subsidiary company owned by several of the major international oil companies. In this way all seven of the major international oil companies discussed in chapter II became interested in Middle East oil.

Summary: The techniques of control.--Prior to 1920 American companies either had been indifferent to foreign reserves or they had been largely frustrated in their efforts to acquire reserves in the Eastern Hemisphere, owing to restrictive national and colonial policies of foreign governments and of private oil interests. After 1920, however, they became actively interested in foreign reserves, spurred by the dual fears of a prospective shortage of American oil and of a British-Dutch monopoly of foreign reserves. This increasing interest was also stimulated by the rising costs of American oil and the current and prospective discoveries of large foreign reserves which would afford to their owners a ready supply of cheap oil, advantageously located to important consuming markets.

This growing interest was transformed into successful effort by the American oil companies in acquiring substantial oil reserves in South America, principally in Venezuela, and in the Middle East. The following chapters of part II describe the process by which these oil reserves were brought under the control of the seven international oil companies.

This control over foreign reserves has been achieved through the use of two techniques, joint ownership and long-term contracts for the sale of crude oil. In the Middle East, the interests of the seven international oil companies have been woven together by joint ownerships of subsidiary companies, each holding interests in one or more of these joint enterprises. This interlacing of control is revealed through the history of the political and private diplomatic negotiations preceding the organization of the jointly owned subsidiary companies and by an analysis of the management and operational policies of these subsidiaries after their organization. The interests in the Middle East of five of the seven international oil companies have been still more closely interwoven by the execution among them of long-term contracts for the sale of crude oil. The long period of the contracts, the great quantities of oil involved, the unusual nature of the pricing methods and the conditions of sale, and the inclusion of provisions restricting the marketing of the oil suggest that these contracts extend far beyond the ordinary business transaction.

In Venezuela, the three international oil companies owning the bulk of that nation's oil reserves and production were closely bound together through long-term contracts for the sale of crude oil. Closely allied to these agreements, which in effect bound the three companies together in a partnership, were other agreements designed to impose restrictive controls on the production of two of these companies.

As a guide to the discussion in chapters IV, V, and VI, there are presented below the names and ownership of the principal corporate bodies operating in the Middle East. 41

I. The following three companies of British nationality control the entire oil reserves of Iraq:

1. Iraq Petroleum Co., Ltd. (formerly Turkish Petroleum Co.), 75-year concession in provinces of Bagdad and Mosul east of the Tigris River granted in 1925 as a revival and revision of concessions granted by Turkey before World War I.

2. Mosul Petroleum Co. (formerly British Oil Development Co.), 75-year concession covering the area west of the Tigris River and north of latitude 33°, originally granted to British Oil Development Co. in 1933.

3. Basrah Petroleum Co., Ltd., 75-year concession covering the province of Basrah, granted in 1938.

The ownership of these three companies is divided as follows:

Royal Dutch-Shell Co. (British and Dutch) 23. 75
Anglo Iranian Oil Co., Ltd. (British) 23. 75
Compagnie Française Des Petroles (French) 23.75
Near Last Development Co. (American) representing: 23 75

Standard Oil Co. (New Jersey), 11.875 percent


Socony-Vacuum Oil Co., 11.875 percent

C. S. Gulbenkian (Syrian individual of British citizenship) 5. 00
Total 100.00

II. Anglo-Iranian Oil Co., Ltd. (originally Anglo-Persian Oil Co., Ltd.), original concession to William D'Arcy in 1901 revised to a 60-year concession in 1933 covering 100,000 square miles in Iran. The company is owned by--

British Government. 56
Burmah Oil Co. (British-Royal Dutch-Shell affiliate) 22
Individuals 22
Total 100

III. Kuwait Oil Co. Ltd., 75-year concession granted in 1934, covering all of Sheikhdom of Kuwait. Company is owned by--

Anglo-Iranian Oil Co., Ltd. (British) 50
Gulf Exploration Co. (American-Gulf Oil Co.) 50
Total 100

IV. Bahrein Petroleum Co., 55-year concession granted in 1940, covering all of Bahrein Islands and territorial waters. The company is owned by--

Standard Oil Co. of California 50
The Texas Co 50
Total 100

V. Arabian American Oil Co., originally a 66-year concession granted to Standard Oil Co. of California in 1933. This concession was augmented in area in 1939 to cover a total of 440,000 square miles in Saudi Arabia and the entire concession was assigned to Arabian American Oil Co., which is jointly owned by--

Standard Oil Co. of California 30
The Texas Co 30
Standard Oil Co., New Jersey 30
Socony-Vacuum Oil Co., Inc 10
Total 100


Go to Chapter 4 of The International Petroleum Cartel, "Joint Control Through Common Ownership--The Iraq Petroleum Co., Ltd.," pp. 47-112


1. The present Royal Dutch Petroleum Co. was incorporated in 1890 as Royal Dutch Co. for the working of petroleum wells in the East Indies. At that time it was a local Indonesian enterprise (Moody's Industrials, 1950, p. 2107).

2. Commissioner of Corporations, Report on the Petroleum Industry, pt. 1, Position of Standard Oil Co, (1907), pp. 48 and 51.

3. Ibid.. pp. 1 and 8.

4. According to Twentieth Century Petroleum Statistics DeGolyer and MacNaughton, 1949), the proportions of world crude oil produced in the United States at 5 year intervals from 1900 to 1945 and for the year 1948 were as follows:

  Percent of United States   Percent of United States
1900 42.7 1930 63.6
1905 62.6 1935 55.4
1910 63.9 1940 62.9
1915 65.1 1945 66.0
1920 64.3 1948 59.2
1925 71.4    

5. It appears that this same fear of an oil shortage, either real or imaginary, regularly manifests itself after every war and during periods of national emergency. See American Petroleum Interests in Foreign Countries, hearings before a Special Committee investigating Petroleum Resources, pursuant to S. Res. 36, 79th Cong., 1st sess., 1945.

6. Ibid., p. 299; reprinted from National Petroleum News, October 20, 1919.

7. Ibid., p. 219; reprinted from New York Times, January 1, 1020.

8. Ibid., p. 299; reprinted from National Petroleum News, May 5, 1920.

9. David White, The Annals. "The Petroleum Resources of the World." May 1920, p. 121.

10. John Ise, United States Oil Policy, p. 454.

11. American Petroleum Interests in Foreign Countries, p. 301; reprinted from Engineering and Mining Journal, March 18, 1922, p. 455.

12. Quoted from The Annals. May 1920, p. 132.

13. Anierican Petroleum interests in Foreign Countries, p. 300; reprinted from Sperling's Journal (London), August 1921, p. 30. For a different viewpoint with respect to the oil shortage of this period, see ch. 10 and Appendix II of F. H. Davenport and S. R. Cooke, The Oil Trusts and Ang1o-American Relations, 1924.

14. In 1921, Royal Dutch-Shell drew its supplies of crude from 8 countries. It had 120 bunkering stations in all parts of the world. Federal Trade Commission, Report on Foreign Ownership in the Petroleum Industry, 1923, pp. 16, 20.

15. "S. Doc. No. 272, 66th Cong., 2d sess.; S. Doc. No. 39, 67th Cong., 1st sess.

16. S. 4396, 66th Cong., 2d sess.

17. John Ise, The United States Oil Policy. p. 462. By 5. Res. 311, 67th Cong., 2d sess., the Federal Trade Commission was directed to make a report on the foreign ownership of American oil companies. The report, Foreign Ownership in the Petroleum Industry, was made in 1923. The report emphasized the holdings of Royal Dutch-Shell.

18. Letter from Walter C. Teagle to C. O. Swain, August 12, 1919. The statement was reputedly made in a pamphlet circulated to Shell stockholders. The American Petroleum Institute submitted the above statement to the State Department for its consideration.

19. The Annals, May 1920, p. 133: reprinted from Sperling's Journal, September 1919, Mr. Edgar's remarks were reproduced in the United States Senate without a proper setting. Mr. Edgar was attempting to assuage British taxpayers who were objecting to a large increase in taxes to support Mesoportamia. His remarks, however, were not so interpreted in America, It was immediately after Mr. Edgar's statements were publicized in the United States that Senator Phelan introduced his Government corporation bill.

20. Federal Trade Commission Report on Foreign Ownership in the Petroleum Industry (1923), p. 105, exhibit 15, letter of Standard Oil Co. (New York) February 24, 1922.

21. Ibid., p. 106.

22. Ibid.. pp. 106-107.

23. Ibid., p.39.

24. Ibid., pp. 42-52. It is iinterestjng to note that the mergerof Royal Dutch Co., producing and refining in the Dutch East Indies, and Shell Transport & Trading Co., with crude oil production in Borneo and transportation and marketing facilities in the Far East and Europe, exemplifies a certain degree of elasticity in British policy. To enable Britain to escape to some degree from the previous domination of Standard Oil Co., the American companies were denied production and marketing privileges in India while British and Dutch interests were permitted to participate in marketing their foreign products and their purchased oil both in the Far East and in Great Britain and Continental Europe, with the Dutch owning 60 percent and the British 40 percent of the new merged company.

25. Ibid., p. 125. exhibit 18, letter of Standard Oil Co. (New Jersey), August 4, 1922

26. Ibid., pp. 56-57.

27. Ibid., pp. 57 and 96.

28. DeGolyer and MacNaughton, Twentieth Century Petroleum Statistics (1949), p. 24.

29. Foreign Ownership in the Petroleum Industry (FTC, 1923) p. 62.

30. Arabian American Oil Co., Summary of Middle East Oil Developments (1947).

31. Except as otherwise noted, the information given in this and the succeeding paragraphs is taken from the anntial editions, 1912-32, of Moody's Manual, Poor's Industrials and Moody's Industrials.

32. Concessions held by the General Asphalt Co. date from as early as 1910. Control of these concessions passed to a subsidiary of Royal Dutch-Shell, Burlington Investment Co., Ltd.. in the income of which General Asphalt. owned a 24.8 percent interest. Burlington controlled the Caribbean Petroleum Co. (100 percent), Colon Developrnent Co., Ltd. (75 percent). and Venezuelan Oil Concessions, Ltd. (extent of control not stated). Shell's Venezuelan interests have since been held by these companies and their successors. A minority interest (25 percent) in the Colon Development Co., Ltd., was held during the 1920's by an American company, Carib Syndicate. Ltd., and an attiliate. General Asphalt's interest in Shell's properties was reduced to a royalty basis in 1923.

33. The predecessor to the International Oil Co. had been organized in 1914 to take over the properties of three British companies in Peru. The Tropical Oil Co. had been organized by American interests in 1914 to take up concessions in Colombia.

34. Maracaibo Oil Exploration Co. was organized in Delaware In 1919 to take over and develop the properties of four predecessor companies.

35. The Creole Syndicate was organized in Delaware in 1920 and soon thereafter acquired a number of Lake Maracaibo properties. These properties were taken over by Gulf under management contracts in 1925. Creole purchased four independent companies in 1926-28, whose principal assets were Venezuelan Concessions.

36. Lago Petroleum Co. was organized by American and British interests in 1923 and immediately acquired large concessions in Venezuela. In 1924, Lago and the British Mexican Petroleum Co., Ltd., an affiliate of Pan American, jointly organized the Lago Oil and Transport Co. which acquired property at Aruba, built terminal facilities there, and acquired some tankships. The same British interests that participated in Lago appear to have been interested in British Mexican. In March 1927. Lago purchased a "substantial block of stock of Creole Syndicate." Standard of Indiana acquired control of Pan American in 1925 and Pan American acquired control of Lago and its affiliates in 1926.

37. These properties were apparently transferred later to some other Gulf subsidiary, probably Venezuela Gulf Oil Co., for when South American Gulf was sold in 1936 to the Texas Co. and Socony-Vacuum, it held only Colombian assets, these being chiefly a 75-percent interest, acquired in 1926 from the Cities Service Co.. in the Barco Concession in Colombia.

38. The assets of the Andes Petroleum Co. were jointly held by Andes and by the Atlantic Gulf Refining Co., a subsidiary of Atlantic Refining Co.

39. Control of the Venezuelan Petroleum Co. was purchased by Sinclair Consolidated Oil Corp. in 1930. The date of Gulf's purchase was not clearly stated in Moody's Manual and may have been in 1923.

40. This company was a subsidiary of Mexican Seabord Oil Co. It is not made clear in the financIal manuals whether or not the "option," presumably to purchase, was exercised. In 1930 or 1931, Venezuelan Seaboard and Creole, a subsidiary of Jersey Standard, "pooled" their concessions in the State of Monagas, Venezuela.

41. This information was compiled from Arabian American Oil Co., Summary of Middle East Oil Developments (1948). So far as is known, there have been no significant changes in this information. Tho British Government's share of Anglo-Iranian is sometimes given as a slightly lesser proportion.

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