Office of the Historian

152. Memorandum of Conversation0

Washington, September 25, 1962, 3:30 p.m.

SUBJECT

  • Standard Oil Company’s Opposition to AID Loans for Public Sector Oil Expansion

PARTICIPANTS

  • The Under Secretary Mr. David Sheppard, Executive Vice President and Director, Standard Oil Company of New Jersey
  • Mr. Cecil Morgan, Executive Assistant to the Chairman of the Board on Public Affairs, Standard Oil Company of New Jersey
  • U—Mr. Allan Robbins, Special Assistant (for International Business) to the Under Secretary
  • SOA—Mr. F.D. Leatherman, India Desk Officer, Economic Affairs, Office of South Asian Affairs

Following an exchange of pleasantries, Mr. Sheppard expressed the concern of his company with respect to reports that the GOI was asking AID for a large amount of money for financing public sector petroleum projects in India which could be financed with private capital and which would compete with the Standard Oil Company. The Under Secretary said that there had been a request for financing of a pipeline, the foreign exchange cost of which might amount to about $5.5 million. Mr. Sheppard said that he did not wish to take the Under Secretary’s time to discuss a problem involving a small amount of money in one country. In a [Page 328] larger context his company wished to express its opinion that public funds should not be diverted to areas of activity in which private capital stood ready to do the job. He left a copy of a memorandum (attached)1 on the subject, with the Under Secretary and Mr. Robbins.

The Under Secretary said that he appreciated the viewpoint of the Standard Oil Company; so much so in fact, that he had dwelt heavily on the part of private enterprise in development in his September 18 speech before the annual meeting of the World Bank (IBRD).2 He read a part of the speech (pages 6-9) and gave copies to Messrs. Sheppard and Morgan. The Under Secretary also remarked that the Department in recent instructions (CW-8639 of April 27, 1962, and CA-2673 of September 11, 1962)3 to all Foreign Service Posts had reminded our Ambassadors and other officials abroad of their continuing responsibilities with respect to support for and protection of American private business abroad.

The Under Secretary said that Mr. Robbins would be dealing with problems of American business abroad as they occur in all parts of the world and would welcome a continuing exchange of views with the ESSO representatives.

  1. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Official Use Only. Drafted by Leatherman on October 1 and approved in U on October 11.↩
  2. Not attached and not found.↩
  3. The text is printed in Department of State Bulletin, October 15, 1962, pp. 575-582.↩
  4. These instructions are in Department of State, Central Files, 200.11/4-2762 and 200.11/9-1162, respectively.↩