800.6363/1151a: Airgram

The Secretary of State to the Ambassador in Paraguay (Frost)

A–203. Your despatch 702, January 12.54 As you know the petroleum pool is a cooperative system by which supplies of petroleum [Page 698] products and the facilities for transporting them are being made available, at considerable sacrifice, to many of the American republics. This system clearly does not contemplate that any of the products thus rendered accessible to the participating nations will be placed at the disposal of persons whose actions are inimical to the defense of the Hemisphere.

If Paraguayan officials allow quantities of petroleum supplied to Paraguay under the pooling arrangement to be dissipated by countenancing sales of petroleum products to Proclaimed List nationals, it would be difficult for us to regard seriously any future Paraguayan request for additional allotments based upon the needs of local economy.

Please inform the appropriate Paraguayan Government officials of the foregoing and report promptly to the Department what action is taken to deny Proclaimed List nationals access to Paraguayan supplies of petroleum products.

  1. Not printed.