CHAPTER XV

THE AMERICAN RETORT

The United States began to retort by feverishly carrying out a naval program which aimed at depriving Great Britain of the supremacy of the sea. They built an immense merchant marine, which already numbered, on June 30, 1920, more than 28,000 ships. And their dockyards were busy constructing battleships more powerful than those of Britain. At the Washington Conference, Great Britain was obliged to renounce her claim to the sole naval supremacy. Besides, she could not have continued to struggle for it. The United States can devote hundreds of millions of pounds to their fleet without inconvenience, but Great Britain, who has suffered more from the War, and whose budget--if we are to believe her statesmen--is balanced with difficulty, could not do so. The British people are so over-burdened with taxation that it would be impossible to obtain more from them.

If Great Britain is no longer sole mistress of the seas, what use, in case of war, would be the enormous oil-deposits of which she has secured the possession in Central America, Mexico, and on both sides of South America? What would be the use of all the work of the _British Controlled Oil-fields_?

But if Great Britain still possessed naval supremacy _in the same proportions as in 1914_, it would be sufficient for America to have _a fleet equal to the former German fleet_ in order to prevent her access to the Caribbean Sea. The British fleet would never dare to venture there. It would do as it did from 1914 to 1919!

Now, if the American fleet is in a position to prevent access to the American coast and to the Gulf of Mexico, its adversaries may have the most powerful battleships in their naval bases and the most imposing reserves of motor-lorries and aeroplanes in their depots, yet all these forces, in the present state of oil production, run the risk of being paralysed for want of sufficient supplies.[35]

But the United States are not content with wanting to deprive Britain of her naval supremacy. By threatening reprisals on their territory against the _Royal Dutch-Shell_ and British companies, they compelled the British Government to give way on questions concerning Palestine and Mesopotamia. The Americans were all the more furious to see their prospectors arrested in Palestine, because they had obtained the right to make borings there, before the War, from the Turkish Government. The whole of the valley of Yarmak, the neighbourhood of Bethlehem (Vebi Musa), the south of the Dead Sea, and the east of the Jordan, were to be prospected by the _Standard_.[36] Moreover, by the General Leasing Act of 1920, the Federal Government obtained authority to exact from every oil company operating in the United States, that it should number none but American citizens among its shareholders. A judicial decision has just been given, refusing to British citizens the right to become shareholders in a company of this kind. Moreover, Mr. Daniels, Secretary of the Navy, wished to get a Bill passed through Congress, authorizing the President to place an embargo on the export of petroleum. The _Royal Dutch-Shell_, which now draws 43 per cent. of its output from the United States, would thus be unable to transport it to Great Britain. But on this point he is in conflict with Mr. Payne, the new Secretary of the Interior, who thinks the above-mentioned Bill a sufficient protection for the United States. This Bill forbids the leasing of wells by a corporation of foreign shareholders, unless these latter belong to a country which grants reciprocal treatment; the corporation, besides, must have a majority of foreign shareholders.

The system of reciprocity was inaugurated by President Harding. Governments which allow free competition to American companies receive the like treatment.

The permits solicited by the _Royal Dutch_ will therefore probably be refused, while those sought by Canadian companies, such as the _Midland Oil_, are much more likely to be granted; it will be enough that their British shareholders become Canadians. For Canada has always allowed the _Standard Oil_ very great liberty on her territory. In April 1919, she even refused the association of interests proposed by the _Shell_, for fear of offending Washington. If ever war broke out between Great Britain and the United States, Canada would almost certainly proclaim her independence and break away from the British Empire.

The General Leasing Act may become a dangerous weapon in the hands of the _Standard_, and will perhaps be used by it to bring pressure on the _Royal Dutch_, which has several times refused its co-operation. Many Californian companies, subsidiaries of the _Shell_, have already been called upon to prove that their shareholders are really American citizens as required by Congress.

Thus, the threats uttered by Walter Teagle at the meeting of the American Petroleum Institute in 1920 are beginning to be put into execution: "If foreign Governments insist on carrying out their policy of nationalizing oil-bearing territory, if they insist on keeping petroleum deposits for their own future profit, at the same time demanding from the United States the satisfaction of their present needs, then there is no alternative for us but to take note of their attitude and, as a means of self-protection, to examine the methods of preserving our own oil for our own needs. Given their position in the world's commerce and the economic and financial weapons they have in their hands, the United States could certainly compel other countries to a redistribution of oil-bearing land, so as to obtain a part of those territories which these countries wish to keep for themselves."

"_Great Britain_," Senator Phelan pointed out, "_holds one half the world's oil and produces only a quarter, while the United States, owning one-sixth, produce three-quarters._ In the possible conflicts of to-morrow, she desires, by means of oil, not only to have all the chances of success on her own side, but also to take from her future rivals, although they may be her friends of to-day, these same chances of triumph. She tries deliberately to diminish the resources of America, which will be exhausted in eighteen years, as things go at present."

Shortly afterwards, in 1920, the former Secretary of the Interior, Mr. Franklin K. Lane, anxiously wondered whether Great Britain was acting in this way to prevent the growth of the American Navy. "_Now, do such proceedings lead to peace or war?_ Is it admissible that Britain--not merely British capitalists, but the State or Government of Great Britain, that is, a political entity--should take possession of a market of such importance and keep the rest of the world out of it? It is surely obvious that if not only nationals, but States themselves, represented by Governments, take part in economic competition, and turn themselves into business houses or manufacturing firms, there is no hope of appeasing the conflicts which will constantly arise from commercial rivalry."

FOOTNOTES:

[Footnote 35: _Producteur_, January 1921, _Les Grands Programmes Nationaux_.]

[Footnote 36: It took America three years to obtain satisfaction as regards Palestine. On April 9, 1922, the British Government notified the State Department at Washington that it granted, at last, to the _Standard Oil_ the prospecting rights which this company claimed, and conceded the same rights to Americans as to the nationals of all Governments signing the Treaty of Versailles.]