831.6363/1346: Airgram

The Chargé in Venezuela (Flack) to the Secretary of State

A–212. Following is translation of excerpt dealing with oil industry from President Medina’s address at Maracaibo yesterday.

[Page 753]

“My speech is getting long, but I see in your faces a question which I do not want to leave unanswered: The revision of our petroleum policy as announced by me at the Palacio de Miraflores on that memorable occasion. The National Government, in fulfillment of one of its inevitable duties, firm in its purposes and sure of its action, proposes to obtain a fairer State participation from the exploitation of petroleum, and also that its industrial process be a sure source of work for the Venezuelan laborer. I must observe that this Government, obedient to the Law, endorser of the guarantees which honor our Constitution, watchful of the righteousness of its procedures and not in the least given to hastiness, respects the rights legally acquired, does not consider as adversaries those enterprises which have brought their capital to extend the development of our natural wealth; but, animated by a spirit of right and justice it believes that Venezuela should receive an adequate participation in keeping with its position as owner of that which constitutes the real source of that industry, and that its industrial process should have its principal headquarters in Venezuela in order that the opportunities for the employment of Venezuelan labor may be intensified. The Government does not attack, it tries to convince and is sure that in its purpose there is fair satisfaction for the Nation and a steady and secure equilibrium for industry because agreements are lasting only when they have a basis of equity and justice. I have said that the Government is not given to hastiness and when, from the Presidential Seat I announced the revision of our petroleum policy, it was because I felt sure that we would come to it by one way or the other, by means of conviction and cooperation or by legal means; if, unfortunately, all of the expected results can not be obtained by the first means, then, leaving aside the reasons for equity, the Government, arming itself with incontrovertible juridical and moral power shall proceed, in the name of the Republic, to regain possession of that which corresponds to it by right.

From the very same moment that I assumed the Presidency, I became extremely interested in this matter of our petroleum policy, which I consider of the utmost importance to our economic development, and it is my conviction that the year 1942 will see the end of a cycle in the history of our petroleum: the cycle of trial of ignorance and empiricism; today we know what we have and it is a duty of my Government to initiate the first stage of what we might call the era of technical, economical and financial exploitation at the service of the State in cooperation with the enterprises associated with us to transform in effective wealth the potential richness of our subsoil.”