765.84/3637: Telegram

The Consul at Geneva (Gilbert) to the Secretary of State

52. A member of the British delegation has informed me in confidence respecting the subcommittee of experts now considering the question of an embargo on petroleum.

The Committee will submit a purely objective technical report and will make no decisions or recommendations. According to its terms of reference it will base its report on the European hypotheses.

The hypotheses are, (1) if non-member states impose a complete or partial (as for example restricted to normal exports) embargo, (2) if non-League states place no embargo; both of which will be considered in relation to the following factors, (3) the effectiveness of an embargo applied by League states on transportation, (4) the question of indirect supply, (5) the extent to which Italy can employ substitutes, (6) the amount of Italian petroleum stocks.

It is anticipated that the figures will show that if (2) obtains any League embargo would not be effective. This would of course carry the implication that non-sanctionist states (chiefly the United States) would in such a case nullify any embargo measure.

Among the other states concerned he mentioned Egypt (which the British assert they can control so that it is in effect a League state) and Albania a non-sanctionist state whose supply is not important.

In respect of (1) there remains the problem of the possible defection [Page 106] of certain League states. In this connection he stated that Venezuela is entirely non-committal as to her policy and is attending the subcommittee solely as an observer.

Respecting (3) he expects the Committee to find that Italian and non-League tanker tonnage would be sufficient for Italy’s needs.

Respecting (4) the main concern is Germany.

Respecting (5) it is believed may be found to be an important factor.

Respecting (6) information is incomplete but it is believed that the supplies will be substantial.

The report will show conclusions which would intimate that the shipments of petroleum by the United States would nullify a League embargo. I do not doubt, however, that such inferences will be expressed in the press as drawn from the figures of American shipments embodied in the report. I feel that, however, such conclusions will be offset to some degree by the data submitted under point (5) and in a practical sense by point (6).

The Committee of Eighteen to which the report will be made will in my informant’s opinion probably not meet until March. The whole atmosphere of his conversation was that no petroleum embargo would be actually applied. He mentioned that the procedure might be the placing of a relatively distant date for an embargo which would then be lifted when the date was reached as not offering a possibility of being effective. Note in this connection Consulate’s despatch No. 1570, political, January 29.90

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