Chapter XXII Conclusion
The World in 1923
The political independence of a people may sometimes be nothing but a sham. France, having neglected to obtain her share in the division of the world’s oil, is to-day in a position of dependence upon Britain and America. If, to-morrow, she had to defend herself against a fresh attack, her tanks, her aeroplanes, her submarines, and the whole of her supply services could only function by consent of her Allies. Even with the first army in the world, France could be victorious only if Britain and the United States permitted.58
Already in time of peace, nations without oil were in a position of considerable inferiority, in view of the hundreds of uses to which oil is put in industry, and especially in the important sphere of the transport and distribution of commodities. There is no true independence for a people but that which is assured economically and financially. Military supremacy is only the happy result of proper efforts undertaken to attain it. During the War, such independence was to be desired for France even more than during peace: it would have avoided the heavy debts which she incurred to her Allies, and it would have enabled her to exploit herself the resources at home and in the colonies which she has been compelled to hand over to foreigners.
Before the War, France consumed more than 400,000 tons of oil a year. To-day, she requires 1,500,000, and the oil wells of Alsace, which the Treaty of Versailles has restored to her, produce only 60,000 tons, and Algeria 3,000-4,000 tons.59 Thus, she is obliged to pay the foreigner nearly 2,000 million francs a year in order to obtain the oil which she lacks.
Nevertheless, there is almost certainly oil in France, in the Ain valley, the Jura Mountains, Auvergne, and the Landes; there is oil in the French possessions in Northern Africa and in Madagascar; there must be some in the Cameroons, in Indo-China, and in New Caledonia. Is it not abnormal that the West Indies and Guiana, when in British or American hands, produce oil, but when in French hands never yield anything? The same applies to Oceania. But there is no reason to be astonished at this; for, under the legislation which was in force since 1810, no Frenchman had any inducement to search for oil. This explains the epigram of one of the most important members of the French cartel, when he declared that “the greatest misfortune that could happen to an oil magnate in France would be to discover a spring of oil.” Happily, on March 22, 1922, the Chamber altered this state of affairs by granting, as was suggested in the first edition of this book, the guarantees which are indispensable to prospectors. Till that year, the exploitation of deposits which a prospector had discovered might be conceded to any foreign company which came on the scene at the right moment to reap the fruits of his labours. Repayment of money laid out was highly problematical, for the local authorities used to grant this only to those responsible for the final investigations leading directly to the discovery of oil. Now, hunting for a “wild cat”—the American term for a boring—is a very risky operation, which entails considerable expenditure. In a protest submitted to the Ministry of Public Works by five Algerian colonists, who had carried out explorations and borings upon land for which a concession was now asked by a company of foreign origin, the colonists stated by affidavit that they had spent 870,000 francs upon 14 borings and 85 wells, of which seven alone were actually producing a few tons of petroleum. Even so, the proportion of seven successful wells out of 85 is rather high. O’Donnell, the president of the American Petroleum Institute, estimates that, out of every hundred borings made, 98 are unprofitable. But for fifty years the 2 per cent. which succeeded sufficed for the consumption of the world.
The policy of France in the Near East since the War has been simply one long suicide. Little by little, French diplomacy has abandoned everything that was promised by the agreements of London. While the San Remo Agreement marked the complete downfall of France in Asia, it considerably strengthened the position of Britain: not only does it recognize all rights acquired by Great Britain, including those which, as in Mesopotamia, rested upon a highly insecure foundation, but it gives British capitalists an important opening in French colonies which are still almost untouched, whereas the corresponding advantages which it confers upon France in some (not all) British colonies apply to territories where the most desirable fields are already being exploited.
France is paying for her past inertia.
If the Allies have to thank the two great trusts for enabling them to get their supplies of oil during the War, the latter in return have notably increased their power. The defeat of the Central Empires has brought about the ruin of their rival, the Europeanische Petroleum Union, and the destruction of the network of interests which Germany had succeeded in spreading over Galicia, Rumania, Russia, and Turkey.
The ambition of the Royal Dutch since it linked its fortunes with those of the British Empire knows no bounds. Its latest success at Djambi has now spurred it to ask the Netherlands Government for a monopoly of exploitation in all the Sunda Islands. It has almost reached the point of eliminating its American rival completely from the Far East.
The Standard retaliates, and sends prospectors wherever they are admitted—to Abyssinia (January 1921), Peru, Colombia, the Philippines, Bolivia. It has gained a footing in the Azores, and in July 1922 was trying in Ecuador to acquire control of the Lobitos from the Anglo-Ecuadorian. It is actively cultivating the Government of Czecho-Slovakia for the grant of exclusive rights of exploitation, and it has obtained from the Italian Government a concession for the oil deposits of San Saba, near Trieste. But the Chinese Government has refused the permanent agreement which it proposed.
Walter Teagle wishes the Standard, like the Royal Dutch-Shell, to become a producer of oil and not to content itself with the mere control of refining and distribution. But the time is long past when Rockefeller controlled 95 per cent. of the sales of oil in the United States. Although the Standard’s capital has risen to $1,310,000,000 and the number of its subsidiaries to 62 it now refines only 49 per cent. of American oil. In the United States there are forty-four independent companies, representing a capital of two thousand million dollars, which carry on, not only the extraction, but also the transport, refining, and sale of oil. Still more serious, the Anglo-Dutch trust has succeeded in establishing itself on the territory of the Union itself; at a recent congress of the American Petroleum Institute, Walter Teagle showed that the Royal Dutch-Shell drew 43 per cent. of its total production from the United States. Be that as it may, the Standard, in America, is always regarded as the great national champion, upon which falls the task of fighting the Royal Dutch and the British Empire, which have laid plans for depriving the United States of their supremacy in oil. Who attacks the Standard attacks the Washington Government directly. And in Europe it still occupies a strong position through its various subsidiary companies. The struggle for oil is no longer a rivalry between great trusts; it is a struggle between nations.
Bibliography
FRANCE
Agence Économique et Financière (1920-21).
Annales Franco-Helléniques (1920).
Bérenger, Henry, Le Pétrole et la France (1920). La Politique du Pétrole (1920).
Brésil (1920, “Le Pétrole en Amérique latine”).
Capital (1914).
Courrier des Pétroles.
Delaisi, Francis, Oil: Its Influence on Politics (1920: English translation, 1922).
Économiste Européen (1906-21).
Épargne (1919).
Europe Nouvelle (1921).
Financial Bulletins of the Société Générale.
France Économique et Financière.
Information (1906-21).
Le Page, L’Impérialisme du Pétrole (1921).
Messager de Paris (1919-20).
Moniteur Économique et Financier.
Mouvement Financier (1909).
Nouvelles Économiques et Financières.
Parliamentary publications: Reports presented for the Customs Commission by the Duc de la Trémoïlle (March 1919), and Senator Jean Morel (June 1919).
Report presented for the Finance Commission by M. Charles Leboucq (June 1920).
Documents submitted to the Sub-Committee on Oil of the Chamber of Deputies (1920).
Producteur (1921).
Revue des Deux Mondes (1st April, 1920, Contre-Amiral Degouy, “Le Pétrole et la Marine”).
Revue Financière (1911-21).
Revue Politique et Parlementaire (August 1920).
Revue Universelle (October-December 1920).
Vie Financière (1914-21).
Vie Économique et Financière (1912).
GERMANY
Ludendorff, My Memoirs.
Potonie, Entstehung der Steinkohle, des Petroleum, u.s.w. (Berlin, 1910).
Vossische Zeitung (1913, “The Troubles in Mexico”).
BELGIUM
Revue Belgo-Roumaine (1920, “Le Pétrole en Roumaine”).
Revue Économique Internationale (1921).
GREAT BRITAIN
Daily Graphic (1913, “The Troubles in Mexico”).
Daily Mail (1920).
Engineering and Mining Journal.
Financial News (1912-21).
Financial Times (1921).
Financier.
Lord Fisher’s Letters to the Times (September 1919).
Manchester Guardian (1921).
Petroleum Review (1910-21).
Petroleum Times (1920).
UNITED STATES
Barnes, The Romance of Persian Oil. The Standard Oil Companies (1920).
Brooklyn Eagle (1920-21).
Nation (1921).
Petroleum Magazine (1921).
Public Ledger (Philadelphia).
Reports of the State Department for Foreign Affairs.
Hepburn Committee.
Inter-State Commerce Commission.
Director of the Bureau of Mines to the Secretary of State for the Interior.
Statistics of the Geological Survey.
Smithsonian Institute.
Independent Oil Producers’ Agency.
American Chamber of Commerce in Paris.
National Bank of Commerce of New York.
Washington Post (1919-20).
World’s Work (1920).
MEXICO
Boletin del Petroleo (1920-21).
Statistics of the Technical Commission on Petroleum of the Ministry of Commerce, Industry and Labour.
Notes
58 Herein lies the explanation of the undecided policy of France since the signature of the Treaty of Versailles.
59 But she also possesses at Les Telets, near Autun, bituminous shale which, in 1917, produced 103,400 tons, yielding 75 litres of oil per cubic metre.