Memorandum by the Under Secretary of State (Phillips)

Mr. Chester O. Swain, of the Standard Oil Company of New Jersey, called me on the telephone to say that his company has just received information from their representative in Paris to the effect that the representatives of the three major oil companies (the Shell, Anglo-Persian and Standard Oil of New Jersey) doing business in Germany have been summoned to Berlin by the Secretary of State for Economy. It appears that, in addition to the present requirements of a four months storage supply to be maintained in Germany, the three companies must hereafter keep in addition 1,000,000 tons in storage. Moreover, it is now required that the proceeds of all sales are to be kept in Germany for a period of five years, which, according to Mr. Swain, means an accumulation in Germany of a sum amounting to roughly $250,000,000. In addition all exchange risks are to be borne by the companies. Mr. Swain said that his company objects strongly to any such arrangement.

There is to be a meeting in London on Thursday next of the three companies. I asked Mr. Swain to keep us advised of the result of this meeting. He did not know whether the British Government had, as yet, been advised of the situation.

I told Mr. Swain that I was going on my holiday at the end of this week and asked him to keep in touch with Mr. Livesey.18

William Phillips
  1. Frederick Livesey, Assistant Economic Adviser.