Odor of Oil (Cond'd)

In Addis Ababa last week, Ethiopian courtiers told correspondents that their Emperor was angrily rebuking U. S. Charge d'Affaires Cornelius Engert inside the Royal Palace.

"The Emperor considers that Secretary of State Cordell Hull acted with gross misjudgment in persuading the Standard Vacuum Oil Company to cancel the Rickett concession," said the Emperor's spokesman, adding that His Majesty told Mr. Engert hotly: "We need the co-operation of somebody--instead of obstacles, OBSTACLES!"

Co-operation was what no Great Power would give Ethiopia last week except in words (see p. 18). The blatant announcement last fortnight that Haile Selassie had conceded subsoil rights in half his empire to British Promoter Francis Rickett and his mysterious backers (TIME, Sept. 9) was universally called by statesmen and financiers last week a "nigger trick." Anything but smart was this dusky African potentate's pathetic belief that President Roosevelt would defend Ethiopia against Italy as a result of the midnight signing of the Rickett concession. Equally footless was his loss of temper in accusing Secretary Hull of "gross misjudgment." This petulant error Charge d'Affaires Engert erased by denying the assertions of the Emperor's own entourage that he expressed himself in violent terms. According to Diplomat Engert the Emperor merely voiced "regret" that Standard Oil is not to lead the U. S. Marines to the rescue.

If, when the Rickett concession suddenly flared in the U. S. headlines, oilmen of the firms that make the name of Rockefeller great had promptly said that of course they hired a British promoter to get oil rights from Ethiopia, that of course they set up a Delaware corporation to handle the details, and that of course they would do whatever President Roosevelt liked, things would have been much easier for them last week.

Instead, when the concession on which their companies had been at work for months was announced from Addis Ababa fortnight ago, they said:

President John A. Brown of Socony-Vacuum (New York Standard Oil unit): I know absolutely nothing of the reported Ethiopian concession. The African Exploration & Development Company is not affiliated with the Standard Oil Company.

Board Chairman William Stamps Parish of Standard Oil of New Jersey: So far as having any interest in the matter is concerned it has never been considered or talked of. The African Exploration & Development Company is not a Standard Oil subsidiary.

Vice President & Director Henry Dundas of Standard Vacuum Oil (a subsidiary jointly owned by Socony-Vacuum and Standard of New Jersey to handle much of their foreign business): There is absolutely no truth that we are involved in this undertaking.

These categorical statements stood uncorrected over the long Labor-Day weekend. When the State Department reopened on Tuesday snowy-crested Secretary Hull called in Washington correspondents to tell them that he still did not know who was behind Promoter Rickett. Few minutes earlier, unknown to Mr. Hull, Vice President Dundas and his chief, Board Chairman George S. Walden of Standard Vacuum Oil, had sent in their cards to Chief Wallace Murray of the State Department's Division of Near Eastern African Affairs. In his shirtsleeves, Diplomat Murray was fingering a pencil and thinking to himself as he looked out the window that in Ethiopia it must be raining too. Putting on his coat, Mr. Murray prepared to receive Standard Oil, remarking to his secretary, "I wonder what they want?"

One of the callers coughed and looked expectantly at the other as they sat down. "Uh-hm! Mr. Murray, I am Mr. Walden, Chairman of the Board of the Standard Vacuum, and this is our Vice President, Mr. Dundas."

Poker-faced, Diplomat Murray heard the unhappy oilmen out. After they left he dashed to Secretary Hull, who suggested that Standard Oil return at 3 p. m. Sharp at 3, the oilmen and Diplomat Murray were closeted with stiff, didactic Dr. Stanley Hornbeck, Chief of the Division of Far Eastern Affairs. Dr. Hornbeck soon went downstairs to tell Secretary Hull that Standard Oil had arrived, the actual introduction of Messrs. Walden & Dundas being made by Near East Chief Murray.

That evening at 6 p.m. Secretary Hull had correspondents into his private office to announce that Standard Oil was, after all, at the bottom of the Ethiopian woodpile. Obviously indignant, Secretary Hull declared: "The granting of this concession has been the cause of great embarrassment, not only to this Government but to other governments who are making strenuous and sincere efforts for the preservation of peace. . . . It [is] highly desirable that the necessary steps should be taken at the earliest possible moment to terminate the concession."

Humbled by the State Department's ire, Oilman Walden also had something to say:

"For more than 20 years [we] have been engaged in the petroleum business in Ethiopia. . . . Early this year Mr. Francis M. Rickett of London approached us on the possibilities of negotiating on our behalf a petroleum exploration and development agreement with the Kingdom of Ethiopia. After considerable discussion with Mr. Rickett, it seemed probable that he might be able to secure a concession, whereupon the Standard Vacuum Oil Company organized a corporation in Delaware known as the African Exploration & Development Corporation . . . to acquire such concession when granted. . . .

"This matter was handled in the regular course of business as a private transaction with Ethiopia, but without consultation with any other government. . . . Today . . . after conference with the Secretary of State [I] have decided to advise the Ethiopian Government of our intention to abandon the concession."

"Does this end the whole matter?" pecked a newshawk at the State Department.

"I don't see why it doesn't," said Secretary Hull.

At 8 p. m. he telephoned President Roosevelt at Hyde Park. Exulted the President to the Press: "This is another proof that since March 4, 1933, dollar diplomacy is not recognized by the American Government!"

No evidence appeared that the Ethiopian Government actually received up to this week any official notice of cancellation from the business entity His Majesty knows only as "Standard Oil." Under the concession's terms its cancellation cannot take effect for 90 days, and by that time public opinion may have veered into another quarter.

Last week's excitement at the State Department, and the eagerness of Secretary Hull to feel that everything had been finally settled, sprang naturally from the embarrassment of Peace Lovers when it was at first thought that British League of Nations Minister Anthony Eden would find himself reeking with the odor of oil when he rose in Geneva to carry the Italy-Ethiopia crisis onto a high moral plane. The fact that Promoter Rickett is British and at first said that part of his financial backing was British had made young Mr. Eden look out of character for a few days in his world-popular role as the Lindbergh of Diplomacy.

With Britain showing the cleanest possible diplomatic hands this week, with Standard Oil the butt of slashing attacks by New Deal newspapers, and with Ethiopia's Emperor soured on the U. S., alert London financiers called conditions ripe for Promoter Rickett to obtain his vast concession afresh for British interests if Standard Oil really does not want it.

"I don't know anything about it," snapped President Walter B. Teagle of Standard Oil of New Jersey, arriving in Manhattan from London, where he had remained at the Ritz Hotel during the whole pother. Still 100% mum. Tycoon Teagle debarked in Manhattan last week, while London papers still rumored that he hired Mr. Rickett in the first place and ordered the promoter's fat fee paid last week regardless of future developments.

Significantly Columnist Arthur Brisbane recalled that when playing golf not long ago with John D. Rockefeller Sr. he said, "You have a very able man in Mr. Teagle."

Cackled the 96-year-old Oracle of Standard Oil: "Yes, Walter's coming along, Walter's coming along."

With two of its officials publicly spanked in Washington and others higher up caught in telling the kind of technical lies which few Big Businessmen consider reprehensible when dealing with the Press, Standard Oil last week might well consider itself through with an unfortunate international episode. Unlike Ethiopia's Emperor, it never really expected President Roosevelt to defend its concession with U. S. arms. Like every great oil company, it has scores of concessions and near-concessions on its hooks, plays them close to the chest, dropping one trick here, taking another there. Last week it dropped a trick in Ethiopia because a minor monarch got it into his kinky head that it would be good defensive strategy to rush the concession to signature at a critical juncture in his country's history and then blab about it to the world. Said a rueful Standard Oilman in Manhattan, in a matchless piece of understatement: "The publicity was handled badly."

What was going to happen now to the Ethiopian concession developed this week when the leaky old French steamer Porthos limped into Suez bearing Promoter Rickett. If that Briton had been a crowned head, he could not have been received, according to local newshawks, with greater consideration by Anglo-Egyptian officials. Suez Chief of Police Frank Harvey took the promoter off in a special launch, assigned a squad of detectives to guard him as he hurried from the canal area to Egypt proper. At the barrier an Egyptian officer snapped to salute and Francis M. Rickett drove off escorted by a motorcade of Egyptian troops, with a machine-gun car leading on the three-hour run to Cairo where he put up at the swank Continental Hotel. Announcing he would soon board an Imperial Airways liner for London, regal Rickett gloated:

"Secretary Hull's statement has not impaired the concession. I have the contract signed, sealed and delivered between Emperor Haile Selassie and myself for 75 years--and I have five years in which to find capital to exploit the concession. I can assure you it will be worked!"

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