894.24/1390
Memorandum by the Adviser on Political Relations (Hornbeck)
Reference, my memorandum of conversation with Mr. Thorold of March 20, last paragraph.
The papers here attached,39 handed to me by Mr. Thorold of the British Embassy on March 20, show that the amount of petroleum exported from the Persian Gulf area to Japan for the years 1938, 1939 and 1940 has been small in absolute amount and almost negligible in comparative amount. They show that the contract made between the Anglo-Iranian Company and Japan called for export from Abadan of approximately 1,125,000 barrels; that in 1940 the amount actually sent was 278,000 barrels; that this is 0.8 percent of Japan’s total takings of oil during the year 1940 (whereas the United States supplied 71.8 percent); and that the total export in 1940 to Japan from all Persian Gulf sources was 1,009,286 barrels. They state that the oil from Bahrein is owned by the California Texas Oil Company [Page 799] and the oil from Saudi-Arabia is owned by a subsidiary of that company. The exports to Japan in 1940 from Bahrein and Saudi-Arabia were approximately three times the amount of the export from Iran.
Note: It will be remembered that Mr. Butler stated to me some days ago that Lord Halifax had said to the Secretary that the British Government was prepared to regulate exports of Persian oil and to take the risk of trouble with the Shah of Persia—which they were sure that they would have—in order to get adoption by the United States and Great Britain of a common policy in action which would make the said common policy effective.
In the course of a conversation which I had this morning with Mr. Walden, of the Standard-Vacuum Oil Company, Mr. Walden made to me three interesting statements which have a bearing on the above. (1) He confirmed the information that the amount of oil sent by the Anglo-Iranian Company in 1940 to Japan under the contract had been small. (2) He said that the British Government could absolutely control exports of oil from the whole Persian Gulf area, as they control the Anglo-Iranian Company and as California Texas is a “British company, Nassau registered.” (3) He said that he had not the slightest doubt but that the British Government would withhold Persian Gulf oil from Japan completely if the United States would, by agreement, shut down on exports of oil to Japan from this country.
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