800.6363/438a: Circular telegram

The Secretary of State to Diplomatic Missions in the American Republics

Please communicate the following statement to the Minister of Foreign Affairs and give it appropriate publicity. Please emphasize to the government the importance of its cooperating fully, especially in the establishment of the National Oil Pool Committee, as the success of the plan depends upon full cooperation. The representatives of the principal United States oil companies have been instructed by their home offices regarding the plan.

The problems of delivering petroleum products to the other American Republics and to the Atlantic seaboard of the United States, in view of the tanker shortage arising out of the withdrawal of tankers in order to supply petroleum to Britain, have received a great amount of publicity during recent weeks and are well known.

The Government of the United States believes that the interests of the Western Hemisphere will best be served if the reduction in available tanker tonnage is distributed in such a way as to bring about equality among all the American Republics.

It is the view of this Government that such equality will be achieved if the same percentage reduction in the total amount of petroleum products moved by tankers is applied in the case of each of the other American Republics and to shipments to the Atlantic coast of the United States—adjusted as may be necessary and possible, from time to time, to avoid manifest inequalities arising out of special circumstances.

The Government of the United States is convinced that if the maximum utilization of the tanker tonnage available for these services is to be attained, there will be required the fullest possible cooperation among the Governments of the American Republics and the organizations engaged in the production, transportation and distribution of petroleum products.

In order best to contribute on its part to the realization of these objectives and to the efficient use of tankers under the control of the [Page 172] United States, the Government of the United States has already established an American Tanker Committee. This Committee will be charged with the proper allocation between the several areas of the world of the total tanker tonnage under United States control, and will thus have the task of translating the share-and-share-alike policy above outlined into quantitative terms. Its actions will be subject to approval and review by the Petroleum Coordinator and the Department of State.

The tankers allocated by the American Tanker Committee to inter-American services will be under the jurisdiction of the Petroleum Supply Committee for Latin America, which will be charged with operating a pool of the United States facilities for the distribution of petroleum to and in the other American Republics. This Committee, which has already been established, has the task of correlating the available facilities for distribution with the needs of the various American Republics in accordance with the enunciated principle of equality of treatment. It will report to the Petroleum Coordinator on operating matters and to the Department of State in connection with policy or other matters involving relations with other governments.

While this plan at present is necessarily limited to the operations of the petroleum facilities of the United States, the benefits of which it is capable can not be realized unless the same plan be adopted by all of the American Republics, and unless the principles upon which its successful operation depend are accepted and observed by all organizations within those Republics which are engaged in the production, transportation and distribution of petroleum products. This close cooperation can best be attained, in the opinion of the Government of the United States, by the establishment in each of the other American Republics by appropriate action of national oil pool committees on which would be represented the Government and each of the principal oil supplying organizations, national or private. The Government of the United States is already taking up with the Governments of each of the other American Republics the establishment of such national committees. Each national committee, subject to directions from its own government, would determine the current imported oil requirements of the country and would communicate them to the Petroleum Supply Committee for Latin America.

The Petroleum Supply Committee, with the composite picture of all requirements before it, and the combined transport and receiving port facilities of all participants at its disposal for this purpose, will be in a position to dispatch the available tanker tonnage under its jurisdiction in such a way as to achieve maximum transport efficiency, and equality of both burden and benefit among all countries which join in the plan.

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An essential requirement of this plan is that each organization engaged in supplying oil to the American Republics must use its facilities for producing, transporting, or distributing petroleum with maximum efficiency and with due regard to the principle of equality of treatment among all the American Republics.

Commercially competitive interests must be made subordinate to the interests of national and hemispheric defense.

It is the intention of the United States to make every possible effort to assist in fulfilling the petroleum requirements of the other American Republics. The Government of the United States believes that the method outlined will accomplish this purpose, if it receives the wholehearted support of all of the American Republics.

This statement will also be made by the United States representative at the next meeting of the Inter-American Financial and Economic Advisory Committee.