Memorandum of Conversation, by the Chief of the Division of the American Republics (Bonsal)

Mr. Pratt17 came in at my request. I expressed to him the very great concern with which the Department viewed the current relations between the Government and the oil companies operating in Venezuela. I made it very clear that, of course, the matter was not one in which the Department desired to take an active part so far as specific details are involved.

I went over in a general way the history of these relations in the past few years. I pointed out that the majority of the concessions and contracts under which the companies were operating were obtained in the Gómez era. This was a period during which the relationship between government and business in Venezuela failed to develop along the lines followed in other parts of the world. As a result, Venezuelan public opinion since the death of Gómez has been increasingly desirous of placing these relations upon a more modern basis. I said that it seemed to me a great tribute, both to the good sense and tolerance of the Venezuelan people and to the statesmanship of their leaders that the liquidation of the Gómez regime had been accomplished without serious disturbance or upheaval. I concluded, however, that this tolerance and good sense and this statesmanship did not indicate a lack of either desire on the part of the people or determination on the part of their leaders to make certain fundamental changes in certain situations which had been created in the days of Gómez.

I then turned specifically to the question of the relations between the oil companies and various officials of the Venezuelan Government during the past two or three years. I did not go into details concerning controversial points.…

… I told Mr. Pratt that I was speaking to him at the instruction of the Under Secretary18 and that our conversations with Dr. Parra Perez19 and other officials who visited the United States recently led us to believe that the situation was one calling for prompt and constructive action by the companies.

Mr. Pratt expressed some surprise and said that he had not realized the situation was as serious as I had described it. He stated that his company was most anxious to stay in business in Venezuela and that it could only do so by taking into consideration the interests of the Venezuelan Government and people. He said that he would think over what I had told him and that he would probably instruct the [Page 746] manager in Venezuela (Mr. Linam) to approach President Medina and ascertain his wishes as to the best way in which thorough-going fundamental conversations might be initiated.…

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In conclusion I emphasized to Mr. Pratt the national interest involved in the maintenance of a flow of oil from Venezuela and said that in my opinion this objective could best be obtained through continued operation by United States companies.

  1. Wallace Pratt, vice president, Standard Oil Company of New Jersey.
  2. Sumner Welles.
  3. Venezuelan Minister for Foreign Affairs.