Gen. Jacques Lahovary, Roumanian Minister of Foreign Affairs.
It is perhaps premature to talk seriously of such a Confederation. In the various political quarters where I referred to the question, I found that Roumanians considered it at present very difficult of arrangement, and very dubious whether Roumania could ever enter it. Events of the last thirty years have considerably altered the map of Europe, and in each case smaller States have been amalgamated into kingdoms and empires, such as Italy and Germany. The saying of King Corvin that “The kingdom which has not one language is a mad kingdom” is, in our days, no longer true, Austria being an example. The Serbs, the Bulgars, the Greeks, and the Roumanians are widely separated by language and by race. Yet, threatened on the one side by Germany and the other by Austria, they may, in the near future, find it judicious to combine, as the only way of preserving their territory and independence. The difficulties of the problem are, however, many. The Greeks and Bulgars are at drawn swords, the Roumanians and Greeks have broken off diplomatic negotiations, and between the Serbs and Bulgars the feeling is not really so friendly as it should be. At the bottom of all, too, we find the everlasting question of Macedonia, which, in itself, must prevent a Confederation. But if it is ever accomplished, then it will take a high place in the general politics of Europe. Besides, it is improbable that the Confederation could ever be formed without objections being raised by the Powers, and it is very likely a great war might result. In Roumania, therefore, the idea of a Balkan Confederation is not regarded with great favour. The first question of all is Macedonia—ever Macedonia, and “the terrible Greek.”
As regards the internal politics of Roumania, they are not within the scope of this present volume. Both the finance and commerce of the country seem to be in an excellent state notwithstanding the recent dissatisfaction of the peasantry. Thanks to the efforts of M. Jonesco, the finances of the country are now in a thoroughly sound condition, and every day sees greater prosperity. As I found in Servia and in Bulgaria openings for British capital, so there is in Roumania also many openings for British industrial enterprises, especially weaving. The climate is not favourable for cotton-spinning, but for weaving there are many enterprises that would pay good dividends.
In the petroleum wells there have been, since their discovery fifteen years ago, about 150,000,000 francs of foreign capital invested. Greater part of this is German, but there is also a French, Italian, and Dutch element in the various companies exploiting the wells. The Standard Oil Company of America have about 15,000,000 francs invested, but there is no British enterprise. The oil is refined in Roumania, but a good deal of crude oil is sent to France, as well as great quantities of benzine.
From Turn Severin, on the western border of the country, the petroleum zone can be distinctly traced at the foot of the Carpathian Mountains, skirting them in their course through the country towards Bukovina and Galicia on the north-east. Along the whole length of this zone are primitive hand-dug wells, the workings prior to 1873, when the American oilfields were discovered. Since 1895, however, a new stimulus was given to the industry by the modification of the mining laws, and from that date the oil industry has been gradually increasing, and only awaits the introduction of British capital to develop the enormous oil-fields.
It is claimed that the Roumanian petroleum contains 14, 15 and 25 per cent. more pure oil than American, Galician, or Caucasian oils respectively. The total production in 1905 was 602,000 tons, or double the production of four years ago, while the export has nearly doubled in the past two years. The Deutcher and Dresden Banks and the Disconto Gesellschaft have about three million and a half pounds invested in it, while a new company, called the “Trajan,” with a capital of £200,000, has recently been formed, of which Marmorosch, Blank, & Co. of Bucharest, the principal promoters, have taken two-fifths. It will absorb the “Helios” and several other minor companies.
Very large areas of the Roumanian oil-fields are the property of the State, and have hitherto been unworked, but the Minister of Commerce, when I questioned him upon the subject, informed me that a law recently passed by the Chamber provides for the leasing of these lands to private companies, though important provisos are introduced in order to prevent monopolies. The Minister explained to me the chief points of the new laws, and as they may interest British capitalists, I give them. It appears that the Government may now lease for a period of fifty years prospected or unprospected land of maximum areas of 100 and 1000 hectares respectively. The concession is granted to the party offering the highest rent. No more than three lots can be leased to one concessionaire. The capital, which must be at least 2,000,000 francs for every 100 hectare lot of prospected land or 1000 hectares of unprospected land, must be deposited. Amalgamation or assignment is illegal, and any secret fusion involves loss of the concession. The State reserves to itself the exclusive right of working all means of transport for petroleum, and will take a compensation of at least 10 per cent. on the gross profit of the working. Over and above that rent, the State participates in the net profits of the working as follows: (1) one-third should the net profit fluctuate between 10 and 30 per cent.; (2) from 30 and more per cent., the share of the State is 50 per cent. of the net profits. The State levies upon concessionaires a lease-charge of 20 francs per hectare, and in addition the general taxes are to be paid. All concessions are subject to Roumanian laws and regulations, and the State assumes no responsibility for the profitableness of land leased.
These conditions are certainly onerous, yet there is no doubt a big field for British capital in Roumanian oil. The Minister of Commerce impressed upon me this fact, and declared that he would give every facility to intending concessionaires, providing they were properly introduced, and were persons who meant serious business.
In the words of our Consul-General at Galatz, “It is not very easy to account for the apathy of British capitalists in seeking openings in Roumania. Perhaps its position in the remote corner of Europe, and perhaps the difficulties of language have something to do with it.” Anyhow, there is a big future before the oil industry in Roumania, and it is amazing that no one has yet had the courage to try the business under the new conditions. As the Minister pointed out, “The American Standard Oil Company are already firmly established in Roumania. Why should not an English company also work the fields?”
The future, and not a far-distant one, will no doubt see many of the wells exploited by British capital.