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The Barco Concession in Colombian-American Relations, 1926-1932

Published online by Cambridge University Press:  11 December 2015

Stephen J. Randall
Stephen J. Randall*
Affiliation:
McGill University, Montreal, Canada
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Extract

The debate over the granting of petroleum concessions to foreign enterprise was one of the most significant areas of contact between the United States and Colombia after World War I. The official United States response to the plight of American interests involved in the development of the Barco concession exemplifies the nature of United States Latin American policy in the transition from the Coolidge to the Hoover administration. State Department actions in the Barco instance underline the growing awareness in American circles of the need to fashion a policy which would protect American enterprise as well as the principle of foreign investment against nationalist sentiment in Latin America.

Type
Articles
Information
The Americas , Volume 33 , Issue 1 , July 1976 , pp. 96 - 108
Copyright
Copyright © Academy of American Franciscan History 1976

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References

1 For other aspects of Colombian-American relations, see Parks, E. T., Colombia and the United States, 1765–1934 (Durham, N. C, 1935);Google Scholar Bushnell, David, Eduardo Santos and the Good Neighbor, 1938–1942 (Gainesville, 1967);Google Scholar and the author’s “Good Neighbours in Depression: The United States and Colombia, 1928–1938” (unpublished doctoral dissertation, Toronto, 1972).

2 Green, David, The Containment of Latin America (Chicago, 1971)Google Scholar, develops the theme of anti-nationalism in the mature years of the Good Neighbor policy. The evidence suggests that American petroleum policy in Colombia paralleled that in other areas of Latin America. See Klein, H., “American Oil Companies in Latin America: The Bolivian Experience,” Inter-American Economic Affairs, XVIII (Autumn 1964), 47–72.Google Scholar

3 Miguel Abadía Méndez argued in 1927 that the development of the petroleum industry by the financial interests of a great power constituted a “threat to those possessors who do not move with caution and tact.” Cuellar, Diego Montaña, Colombia: país formal y país real (Buenos Aires, 1963), p. 123.Google Scholar

4 Department of State memorandum, September 12, 1928, 821.6363 Barco/200 1/2, Record Group 59, National Archives (cited hereafter as DS and the file number). In 1936 the Texas Corporation purchased the South American Gulf Oil Company and transferred one-half of the stock to Socony-Vacuum Co., Inc., DS 821–6363 Barco/660. For the cancellation of the Barco contract and the legislative developments see Rippy, J. F., The Capitalists and Colombia (New York, 1931).Google Scholar

5 U. S. Department of State, “Review of Questions of Major Interest in the Relations of the United States with the Latin American Countries” (1933). Mr. Matthews repeated this assertion in an interview with the author in Washington, November 27, 1970.

6 DS 821.6363/310, 339, 348, 359A; 821.6363 Barco/65. Palmer’s letter of December 5, 1927 is in 821.6363/352.

7 U. S. Department of State, Papers Relating to the Foreign Relations of the United States (1928), II, 588 9 Google Scholar. For the Dulles visit, see 821.6363 Barco/72.

8 Ibid., 613–614.

9 Stabler’s account of his mission in a memorandum of July 15, 1928, DS 821.6363 Barco/152. His correspondence with Assistant Secretary Francis White also is revealing; see White MS: Official Correspondence File, National Archives. For the public response to Stabler’s presence, note the editorials of June 29 and 30, 1928 in El Espectador and El Tiempo respectively. Uribe’s protest of non-involvement is from Colombia, Anales del Senado, No. 79, August 13, 1928. In an interview with the author, November 27, 1970, H. F. Matthews referred to Stabler as one of “the last of the old imperialists.”

10 DS 821.6363 Barco/116/119.

11 Diario Oficial, August 17, 1928, pp. 396 ff; El Tiempo, August 5,1928.

12 Piles to the Secretary of State, August 5, 1928, Papers Relating to the Foreign Relations of the United States (1928), II, 623–4 Google Scholar. It is worth observing that Tropical Oil (a subsidiary of IPC of Toronto and ultimately Jersey Standard) was the only commercially productive company in Colombia in this period.

13 British Public Record Office, Foreign Office, September 27, 1928, 371 A7331/2073/11. (Hereafter referred to as F. O. and the file number.)

14 Matthews to the Secretary of State, September 21, 1928, DS 821.6363 Barco/170.

15 Colombia, , Anales de la Cámara de Representantes, Supplemente, May 15, 1929 Google Scholar. There is a perceptive summary of the Colombian response in F. O. 371 A7331/2073/11.

16 DS 821.6363 Barco/172; Matthews to the Secretary of State, September 25, 1928, 821.6363 Barco/182.

17 DS 821.6363 Barco/185. The British Minister commented that Abadía hoped both to undermine the American presence and to thwart the political ambitions of General Alfredo Vásquez Cobo, Colombian Minister in Paris, who was generally popular in American circles in Bogotá. F. O. 371 A7331/2073/11.

18 U. S. Department of Commerce, Circular No. 305, Latin American Budgets, Part III, Colombia and Venezuela (September 28,1928).

19 Monson to the Foreign Office, November 13, 1928, F. O. 371 A8471/5072/11.

20 Bert Hunt to Jones, February 2, 1932, Bureau of Foreign and Domestic Commerce, Record Group 151:640 Colombia.

21 Tropical Oil Company Contract File No. 1–2. Records of ESSO Inter-America, Coral Gables, Florida. Although detailed discussion of this point is beyond the immediate scope of this paper, it is worth noting that in the course of 1929 Abadía turned to a group of international experts on petroleum legislation to revise the original Montalvo bill. The proposal was debated through 1929 but was delayed by the Presidential election of 1930. For a commentary on the new legislation, see a Foreign Office memorandum dated September 19, 1929, F. O. 371 A5931/167/11 and a memo prepared by the Richmond Petroleum Co., August 28, 1929, DS 821.6363/731.

22 Fluharty, V. L., Dance of the Millions (Pittsburgh, 1957)Google Scholar, touches on the election of 1930. See also the New York Times, April 14, 1930, 14:2. One of the most complete accounts of the labour dispute with United Fruit is Montoya, Miguel Urrutia, The Development of the Colombian Labor Movement (London and New Haven, 1969).Google Scholar

23 Matthews to the Secretary of State, October 27, 1928, DS 821.6363 Barco/219; Caffery to the Secretary of State, March 12, 1930, Barco/268-9.

24 DS 821.6363 AN 2/15.

25 It was not until 1931–1932 that allegations were made concerning the relationship between Olaya and Andrew Mellon during the 1930 discussions. The contention that there may have been a quid pro quo understanding between them derived from the fact that on the evening of August 7, 1930, they sat together at a dinner given by Secretary of State Stimson. Representative Patman of Texas claimed before the House Judiciary Committee, investigating various charges of misconduct against Mellon in January 1932, that he had used his official position to obtain the Barco contract for the Colombian Petroleum Company, controlled by his family interests. (A similar claim was made during Hearings of the Senate Finance Committee at this time.) Olaya, Mellon, Rublee, Matthews, and other State Department personnel emphatically rejected the contention. See the New York Times, January 2, 1932, 1:6;Google Scholar January 15, 1932, 2:1; and January 16, 1932, 3:1; Senate Finance Committee, Hearings, testimony of Francis White, January 15, 1932, pp. 1913–20; Department of State, “Review of Questions”, Part II.

26 Caffery to the Secretary of State, November 19, 1929 DS 821.6363/762 and April 17, 1929, Barco/245; Matthews’ memorandum to Francis White, Assistant Secretary of State, May 16, 1930, Barco/278/277; Matthews to White, June 3, 1930, Barco/279.

27 Memoir of George Rublee, the Oral History Collection of Columbia University, p. 229, 245 (hereafter cited as Rublee Memoir, OHC).

28 White to Rublee, May 23, 1930, DS 821.6363/848a; White to Caffery, August 1, 1930, White MS: Correspondence File.

29 Caffery to the Secretary of State, November 4, 1930, Barco/407; American Maracaibo Co. to Stimson, January 8, 1931, Barco/413; Matthews to White, January 12, 1931, Barco/416; Foreign Relations (1931), II, 18–19; Rublee Memoir, OHC, p. 254.

30 Foreign Relations (1931), II, 20–21.Google Scholar

31 Ibid., pp. 21–22.

32 Caffery to the Secretary of State, March 14, 1931, DS 821.6363 Barco/477.

33 Trabajo, Ministerio de Indústrias y , Contrato Chaux-Folsom y documentos relacionados con esta negociación (Bogotá, 1931)Google Scholar. Parks, op. cit., p. 475.

34 Foreign Relations (1931), II, 25 Google Scholar. Caffery to the Secretary of State, March 13, 1931, Barco/476; Stimson to Caffery, March 5, 1931, Barco/464; Caffery to Stimson, March 20, 1931, Barco/482. See the memorandum on the concession in the Records of ESSO Inter-America, Inc., File No. 1–1, May 30,1935.

35 New York Times, June 17, 1931, 16:6 Google ScholarPubMed. One of Colombia’s leading political cartoonists portrayed Olaya as the frontier medicine man peddling the Barco concession as the wonder drug of the Colombian economy. El Tiempo, April 10,1931.

36 Barco/490, 502, 503, 592, 605. One of the most active Conservative opponents of the contract in the Senate was Anibal Cardoso Gaitán, who had been the principal attorney for the Department of Mines and Petroleum from 1927 to 1931. He was an example of a “patriot of deep convictions” who believed the contract threatened Colombian sovereignty. El Tiempo, June 29, 1931. The reference to his patriotism is Caffery’s, Barco/608.

37 Note the following in El Tiempo: March 12, 1931, “All guarantees are contained in the contract” March 21, 1931; March 28, 1931, “Catatumbo Petroleum and Nationalist Politics”; April 9, 1931; June 24, 1931. For the position of El Espectador, see May 6, 1931; June 10, 1931. It is significant that Eduardo Santos, owner of El Tiempo, had been considered anti-American prior to 1930. See Bushnell, , op. cit., p. 7.Google Scholar

38 DS 821.6363 Barco/480,489.

39 The Chaux-Folsom Contract became law 80 of 1931. See Anales de la Cámara de Representantes, July 4, 1931, No. 311, p. 2435.Google Scholar

40 Barco/510. Caffery to the Secretary of State, June 2, 1931, Barco/587.

41 U. S. Senate, Sale of Foreign Bonds…. Hearings Before the Committee on Finance Pursuant to S. Res. 19, 72d Cong., 1st Sess., December 18, 1931 to February 10, 1932.

42 Ibid., pp. 1681 ff. Francis White MSS: Barco Concession Folder.

43 New York Times, January 15, 1932, 1:5;Google Scholar January 21, 1932, 15:1. The hearings revived the earlier speculation concerning Mellon and Olaya. Olaya denied, in a letter to the New York Times, January 21, 1932, 20:7 Google Scholar, that he had discussed the contract with the Secretary of the Treasury. See as well Rublee, ’s letter to the New Republic, LXX (February 17, 1932), p.21.Google Scholar

44 DS 821.51/1579 1/2; Finance Committee, Hearings, Part III, pp. 1700–2000. Department of State, “Review of Questions,” Part II. Stimson, , Diary, entry for January 13, 1932, vol. 20.Google Scholar

45 Shaffer, Edward, The Oil Import Program of the United States (New York, 1968), pp. 4–12 Google Scholar. In 1949 the National Petroleum Council asserted that “the participation by United States Nationals in the development of world resources is in the interest of all nations and essential to our national security.” Cited in Engler, Robert, The Politics of Oil (New York, 1961), p. 190 Google Scholar. There are some useful materials, which could not be incorporated in this paper, in the Hoover MS, Presidential File, Subject File: Oil Matters, 1929.