892.24/71
Memorandum by Mr. Willys R. Peck, of the Division of Far Eastern Affairs, of a Conversation With the First Secretary of the British Embassy (Thorold)6
Mr. Thorold called on Mr. Peck about 12:45, noon, and in the course of a general conversation concerning the supplying of the petroleum needs of Thailand, confirmed the observations made over the telephone the day before (see memorandum of May 157), to the general effect that the British Government would be reluctant to see Thailand’s needs supplied before the British Government had received certain undertakings from the Thai Government, especially an undertaking that tin, rubber, and rice should not be diverted from their usual export channel through Singapore and sent direct to Japan. Mr. Thorold seemed anxious to learn whether the American Government shared this attitude to the extent of being willing to obstruct supplies of petroleum to Thailand unless and until such undertakings were given.
Mr. Peck observed that in present circumstances the American Government appeared to be without any legal facilities for obstructing such shipments, except in the case of petroleum products subject to export license requirements.
Mr. Thorold said he supposed this was the case, but again referred to the fact that Thailand met the obstacle of scarcity of tankers and the requirement that iron and steel containers be licensed for export.
Mr. Thorold remarked that the Shell and Standard-Vacuum Oil Companies seemed to be willing to resume the sale of petroleum products [Page 154] in Thailand, provided they were given the distribution privileges they enjoyed before such privileges were abolished in the summer of 1939; in that case, they would presumably distribute in Thailand petroleum products from the Netherlands East Indies, the nearest and most natural source of supply. Mr. Thorold said that if this procedure were accepted by the Thai Government, the British Government would still be anxious that Thailand be supplied on a month-to-month basis only, and not be given enough to accumulate reserve stocks. He said he thought the British and American companies concerned would willingly conform to suggestions in this regard coming from the British and American Governments. He inquired what position had been taken by the State Department in regard to resumption of business by the two oil companies.
Mr. Thorold referred to the proposals made in the British Embassy’s two aide-mémoire of April 8 and said that the British Government felt that the American Government was in the better position of the two to deal with the question of financial and economic assistance to Thailand. Mr. Thorold assented to Mr. Peck’s suggestion that attention to the proposals made by the British Embassy on April 8 seemed now to be reduced to the matter of petroleum supplies. He said, however, that rightly or wrongly the British Minister at Bangkok still insisted that Thailand was not yet irretrievably under Japanese influence. He remarked that he gathered from Mr. Hornbeck’s observations to Mr. Butler a few days ago8 that the State Department felt there was little, if any, hope of extricating Thailand from such influence.
About 3:15 p.m. Mr. Peck telephoned Mr. Thorold and told him that when Mr. Walden had called at the State Department on May 14 and broached his idea to Mr. Hornbeck, the latter had said that, as far as he was aware at the time, the American Government would have no objection to the Standard-Vacuum Oil Company informing the Thai Government that they would like to resume commercial operations in Thailand on the old basis.
Mr. Thorold again remarked that the British Government, for its part, was anxious that, from the short view, the Thai Government should not be able to supply its wants before giving the undertakings already referred to, and, from the long view, that it should receive supplies just sufficient for current needs, and he asked whether Mr. Peck thought that the result of Mr. Walden’s talk with Mr. Hornbeck would be that the Standard-Vacuum Oil Company would immediately supply petroleum products to Thailand. Mr. Peck disclaimed any definite information about this point, but said that his impression was that it would take some time before there could be a resumption of [Page 155] business by the companies on the old basis; he felt that the Thai Government might find it difficult to recede from its action in taking over the oil business and that Japanese influence might work against such a change.