The Struggle for Djambi
Meanwhile the Royal Dutch, which, in agreement with the Anglo-Persian, had asked the British Government to reserve for it the exploitation of Mesopotamian deposits, was endeavouring to monopolize the new deposits discovered at Djambi in the Sunda Islands.
Djambi is the last great territory to be exploited in the Dutch Indies; the oil-fields in this district cover four million acres. At first the designs of the Royal Dutch met with no opposition, and it obtained from the Dutch Lower Chamber the grant of these deposits for its subsidiary, the Bataafsche Petroleum. But two representatives of the Standard brought a communication to the Dutch Chamber and Ministers at The Hague. The Standard offered to found a company in partnership with the Dutch Government, which would hold half the territories of Djambi on the same terms as the Royal Dutch. It recalled the fact that in the United States the Dutch had been given every facility, and counted on reciprocal treatment.
This unexpected communication caused great disturbance in the financial and political world of the Netherlands. A deputy asked if the note from the Standard came from the American Government. The Prime Minister replied that he did not know, but that in any case this note must express the views of Washington. A Socialist member proposed exploitation of the whole field by the State; this was defeated by 55 votes to 24. The Liberals, fearing international complications, were opposed to the Government plan. Finally, the Second Chamber adopted this plan by 49 votes to 30.
Thereupon a vigorous Note arrived at The Hague from Mr. Hughes, the Secretary of State, who nearly defeated Wilson on the occasion of his re-election to the Presidency and who holds to-day the most important post in Mr. Coolidge's Cabinet. Mr. Hughes ordered the United States Ambassador to insist vigorously that the Dutch Government should grant the same facilities in the Dutch Indies to American as to other companies. For, he said, the nationals of all countries have an equal right to vital natural resources, and one cannot forbid access to one particular nation. "We do not seek preference over other countries, but we do not wish other countries to obtain advantages to our detriment. And concerning oil, the solution of the problem is to give equal rights to all the companies of all nations."
The Government of the Netherlands sent to Washington its reply to the American Note. It drew special attention to the disinterestedness shown by the Americans at the time when competition was free, a time chosen by the Royal Dutch to make a much more advantageous offer than those of its rivals. In 1915 the exploitation of the deposits in the Sumatra regions was granted to the State; but in 1918 this ruling was modified, and it was decided that exploitation might take place directly by the State, or through the agency of a company, or under the system of a State-controlled monopoly.
At this time no American protest had reached the Dutch Government, and none was sent until after the signing of the contract between the Royal Dutch and the Government.
However, added the Note, there still remain numerous valuable oil-fields in the East Indies, and the Dutch Government would be prepared to grant concessions to American capital.
This affair seems to have been by no means settled by the vote of the Dutch Lower Chamber. The polemic continued between Washington and The Hague. In May 1921 the American Government demanded the publication of its Note of April 19th, which The Hague was determined to keep secret. And in Holland the Colonial Secretary was violently reproached for having concealed from the Chamber the details of the correspondence exchanged with the United States. I have been able to procure the text of the letter submitted by the Standard:
"The development of petroleum deposits is at present a vital question for every country, and increasing attention must be devoted to it by the whole world. The Dutch colonies have the good fortune to possess extremely rich petroleum deposits, especially in the Djambi region. The Standard Oil, an American limited liability petroleum company, asks to be allowed to share in the development of the deposits at Djambi, and a decision must shortly be taken on the matter. Considering the great extent of the oil-fields of Djambi, the Dutch Government will certainly not consider it to the interest of the country and people to allow them to be exploited by a single company.