The most striking proof of the alliance between the British Government and the Royal Dutch is the course of events in India, where the oil situation is peculiar. In 1905, in exchange for certain exclusive rights and for a protective tariff granted by the State, the Burmah Oil Company consented to maintain a fixed price for kerosene. In India, in an open market, kerosene would cost £25,000,000 sterling instead of £11,000,000 annually. Such, at least, is the opinion of Sir John Cargill, Chairman of the Burmah Oil. Before the War, there was overproduction of kerosene in India; this surplus has since been transformed into a veritable dearth. The Royal Dutch supplied the Burmah Oil with the petroleum that was needed to satisfy the Indian market. Thanks to Deterding, India will continue to get its oil cheaper than other countries. Without his help there would have been a considerable rise in price, and the Burmah Oil, in which the British Admiralty is interested, would have been weakened, and would have fallen into the hands of other companies.
The Royal Dutch-Shell has rendered the same service to the British Government in Egypt. "We have conducted our business on the same lines in Egypt," said Sir Marcus Samuel. "In order to help the Government, we have operated in the Egyptian market in the same way as in India."
In exchange the Royal Dutch counts on the support of the British Government. This is the case in Venezuela, where the Venezuelan Government is trying to establish its rights over concessions which the company covets. And not in vain, for on March 7, 1921, it was announced in France that the Venezuelan Courts of Justice had upheld the validity of the fifty years' concessions which had been granted to the Colon Development, in which the Royal Dutch is interested, through the Burlington Investment.
But in Mesopotamia the company seeks the support of France against the Anglo-Persian, and is not opposed to American participation. I believe, rather, that it desires the support of the French Government in case the British Government, hypnotized by the Anglo-Persian, deserts it. In any case, it hopes to play off one against the other.
Deterding's ambition is to crush the Standard Oil. He is the declared enemy of the Standard, Mr. W. Teagle, for whom he has some sympathy, excepted. When people tell him that he will never succeed in getting the better of the Standard, with its enormous capital, he replies that he has the means to fight against all the dollars that the Standard can gather. Has he not the Rothschild millions at his disposal? Besides, he has great advantages over the Standard. I have already mentioned the cost of production of the Royal Dutch in the Dutch Indies. It is considerably lower than that of the American Trust.[13] In a price war this would give it an incontestable superiority. The Royal Dutch-Shell possesses such reserves of oil that the question of exhaustion does not arise for it; and it extends over the whole world, whereas the Standard has been able to root itself firmly in America alone. Several European States have crossed swords with it, for example, Austria, which definitely closed Galicia against it in 1911. Its high-handed methods have made many enemies. The Royal Dutch, on the contrary, thanks to its clever and elastic policy, has insinuated itself into the good graces of most governments. Almost everywhere, public opinion is on its side.
Besides, Deterding knows more about the affairs of the Standard than the Standard itself. This statement was made by a director of the American company. Deterding has no difficulty in following its movements. On one of his visits to New York, he installed himself in the Board-room of the Standard, in order to tell the directors that he was not satisfied with the way in which the Chinese agreement was respected, that they owed him a rebate on oil sold in his preserves, and that they must not sell any more there—or it would be war. He spoke for ten or fifteen minutes, and that was time enough to say a great deal. Without a note, he quoted many details, and even figures; for example, the exact number of gallons sold by the Standard in various places. And when one of his hearers inquired, after his departure, whether it was all accurate, another of Mr. Deterding's interrogators replied: "Last time he came, we took down all his statements in shorthand and verified them afterwards. We saw that he had an incredible knowledge of our affairs in every country in which our interests conflict with his own."
Will there soon be a renewed conflict between the Royal Dutch and the Standard Oil? Deterding wanted it quite recently. If we are to believe the authorities on the matter, we have narrowly escaped the greatest oil war in history. For once, Deterding gave way to the moderate counsels of the more conservative members of his company, and war was not declared. Mr. Colijn was sent from The Hague to the office in Great St. Helen's, in the city of London, and it was announced that Mr. Deterding was taking a much-needed rest.
These personal struggles with the Standard are probably at an end.
Agreement is actively sought, at present, between the Standard and the Anglo-Persian, especially owing to the influence of Sir John Cadman. Since 1922, Elliot Alves and the British Controlled Oil-fields have followed the same policy. Perhaps before long there will be an "oil peace," concluded between the directors of the great Trusts. Was it not even outlined at The Hague Conference? Time will show how long it will last.
My information, drawn from an authoritative source, tends to prove that a great re-grouping of oil interests will not long be delayed.