833.6363/231: Telegram

The Secretary of State to the Ambassador in Uruguay ( Dawson )

341. A conference was held in the Department on June 21 with representatives of the Petroleum Supply Committee for Latin America and of the Office of the Petroleum Administrator for War participating. The Supply Committee and the Petroleum Administrator’s representative stressed the importance of obtaining a modus vivendi between the marketing companies and Ancap before the present agreement expires on June 30, 1943. This would give sufficient time to discuss the problem more fully with Ancap and with the Uruguayan authorities and obviate the necessity of the Committee’s being confronted with what it considers a rather serious threat to the spirit and principles of the supply pool. The matter has been discussed in detail with Ambassador Dawson, who is now en route to Montevideo, and it is desired that he conduct the negotiations personally once he returns. However, owing to the fact that only a few days remain until the agreement expires, it may be necessary that preliminary discussions be carried on by you prior to the Ambassador’s arrival. Therefore, (and depending on the outcome of the inquiries referred to in your 594 of June 17,15 and provided you consider it advisable) you are authorized to communicate informally to the appropriate Uruguayan authorities the following considerations, reporting fully to the Department by telegraph:

In accordance with its well known policy this Government has of course no desire or intention of interposing in any domestic matter such as the implementation of legislation governing the extension of Ancap’s monopoly. At the same time in view of present world conditions the Department feels that this might not be an opportune time in either the general interest or that of Uruguay for any action which might have an adverse effect on the petroleum pool arrangement which, the Department believes, has operated in a manner advantageous to Uruguay. It may be pointed out in this connection that the Supply Committee was organized and functions with the voluntary participation of the various interests concerned including of course the petroleum companies and that a basic principle was that the companies’ relative commercial positions would be frozen for the duration of the pool arrangement.

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