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

Participants: Señor Bustamante, Salvadoran Mission
Señor Mejia, Salvadoran Mission
Señor Vega-Gomez, Salvadoran Embassy18
Mr. Sappington, AP19
Mr. Nuland, AP20
Mr. Cabot, RA

I accompanied the Salvadoran Economic Mission to a meeting in the Petroleum Adviser’s office to discuss the Salvadoran Government’s request for additional (over quota) allotments of petroleum products. Señor Mejía, speaking for the rationing authority in El Salvador, began by saying that the rationing authority had made every effort to maintain consumption within quota limits, that they had received numerous commendations for the manner in which they had done this, and that they were consequently somewhat surprised just before leaving to hear that we had complained that they were running over their quota. A very friendly conversation followed in which it appeared that while Salvador had overconsumed in some products, over-consumption had been balanced by underconsumption of gasoline.

The Salvadorans said that when their mission asked for an additional allotment (which had been granted) to move the coffee crop they had overlooked certain other essentials at other seasons, for example, gasoline for the cotton industry, and asked if we could give equally favorable treatment to such cases. Mr. Sappington then advised the Mission of preliminary allotments for war essential and economic essential uses which had been approved by the Essentials Requirements Committee on the basis of information sent by our Embassy in San Salvador. From the conversation which followed, it was not possible to make a careful study of the extent to which these allotments would meet the full Salvadoran needs. The Salvadoran Mission consequently said that they would study the matter carefully and probably get in touch with us again in a day or two.

Señor Bustamante raised the question of fuel for the maintenance of the gold mines. It was pointed out that the gold mines in the United States had been closed down, and that we had severely restricted supplies to the Mcaraguan gold mines in spite of their importance to [Page 315] the economy of the country. Señor Bustamante explained that the gold mines in El Salvador actually produced about 40 times as much silver as gold by volume, but that they would flood if they were not kept pumped, and that one section of El Salvador largely depended on them for its livelihood. Mr. Cabot said that he was not very hopeful that anything could be done to secure critical materials for Salvadoran gold mines.

Although there were points of disagreement during the conversation, it was entirely affable and each side at the end seemed fully to understand the other.

June 28 and 29.

At subsequent meetings, the Mission again requested an additional allotment for the cotton industry. In this connection, the Mission pointed out that the seasonal allotment for last season for the coffee industry had not been entirely utilized since the Salvadorans had looked upon the allotment as for use only until the end of the calendar year. Thus, with a late crop, Salvador had used regular quota oil for coffee needs in the new year. Also the Mission stated that the gold mining industry would be put on a quota (40%) basis for oil needs.21 On the basis of the arguments advanced, an additional 1000 barrels of oil was approved for the remainder of 1943 for the cotton industry, which amount it was estimated, when added to oil saved from the reduction of the gold mine requirements, would put the industry on a current basis regarding needed oil supplies.

  1. Felipe Vega-Gómez, Attaché
  2. James C. Sappington, Assistant Chief, Office of the Petroleum Adviser.
  3. L. H. Nuland, Executive Secretary of the Inter-departmental Essentials Requirements Committee and representative of the Petroleum Administration for War.
  4. On the basis of the Nuland formula for petroleum distribution!, industries considered non-essential to the war effort were granted 40 percent of normal consumption.