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

No. 1706

Sir: The Department refers to its instruction no. 1650 of September 29, 1943 concerning the renewal of the marketing agreement between the Ancap and the private petroleum companies operating in Uruguay.

There is now enclosed a memorandum of conversation17 held in the Department with Messrs. Ralph W. Bolton and H. A. Metzger of the Standard Oil Company. You will note therefrom that the private companies plan to suggest in the forth-coming negotiations that the renewed contract run for some three years to terminate coincidental [Page 771] with the end of office of the present Uruguayan administration, February 28, 1947. The Department feels that there might be certain general advantages in such an arrangement which would appeal to the Ancap as well as to the private companies and that it would furnish adequate insurance for the present at least against disturbance of the war-time Latin American petroleum pool.

In requesting you to lend your informal support to enable the achievement of an agreement consistent with the best interests of the war effort, the Department suggested in its instruction under reference that, while the length of time the renewal agreement might cover was a matter for negotiation among the principals, a period of two years would not be excessive. In doing so the Department wished to make a clear distinction between a six months’ period and one of a reasonable length in relation to the possible duration of the pool arrangements and the Department has of course no objection to the three year period now desired by the private companies provided it meets with the approval of the various Uruguayan entities involved.

Very truly yours,

For the Secretary of State:
Dean Acheson
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