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

No. 3557

Sir: I have the honor to refer to the Department’s strictly confidential instructions nos. 1650 and 1706 of September 29 and October 23, 1943, respectively, concerning the renewal of the marketing agreement between the Ancap and the private petroleum companies operating in Uruguay, and requesting me to lend my informal support with a view to an agreement consistent with the best interests of the war effort. Reference is made also to the Embassy’s despatch no. 3437 of October 29, 1943, and to my telegram no. 998 of November 23.18

In its despatch no. 3437 of October 29, the Embassy reported that the President of the Board of Directors of the Ancap had inquired of the petroleum companies regarding the conditions under which they would be willing to withdraw from the Uruguayan market. The matter was referred by the the several local representatives to their head offices and, having received instructions, they informed the Ancap on November 15 that the companies did not wish to withdraw and desired on the contrary to commence negotiations looking to the renewal of the marketing agreement. There is enclosed a copy of [Page 772] the memorandum19 handed the Ancap by the local representative of the West India Oil Company. It is understood that identical or similar replies were made by the other companies concerned.

The companies have been in frequent touch with the Embassy and have kept it informed as to developments. After transmitting their reply to the Ancap, the local representatives called at the Embassy for a discussion of the situation with the Counselor of the Embassy and myself. I informed them in a general way as to my instructions and expressed my willingness to make available my informal good offices in the manner authorized by the Department. I said that I wanted to help and not to hinder and that before taking any action I should be glad to have the benefit of their views as to the appropriate time for any discussion which I might have with the Uruguayan authorities.

The representatives of the companies were unanimous in suggesting that my informal representations be made at any early date before the negotiations with the Ancap got under way. They felt—and Mr. Dwyre and I agreed—that the Department’s interest in an agreement consistent with the war effort should be made known to the Uruguayan authorities promptly rather than later when the Ancap might have taken a position from which it would find it hard to recede.

My conversation with the representatives of the companies took place on November 17 and in agreement with them I had expected to see the Minister of Foreign Affairs the following day. However, in the meantime my British colleague informed me that, in view of the British interest involved (Shell-Mex Uruguay Ltd.), he had cabled London for instructions and sent a copy of his message to the British Embassy in Washington. He inquired if I would be willing to wait a day or so in order that le cas échéant our representations might be made more or less at the same time. Having assured myself that this was agreeable to the representatives of the American companies, I informed the British Minister that I would defer my interview with the Foreign Minister. (At the same time I told him that, whatever might be the tenor of his representations, I would not be in a position to take joint action with him and that our interviews with Sr. Serrato20 would have to be separate.)

The British Minister received his instructions over the week-end and on Monday morning (November 22) it was agreed that I would seek an interview with Sr. Serrato that afternoon and that Mr. Vereker would endeavor to see him as soon thereafter as possible. As a matter of fact, Sr. Serrato received me shortly after four and received the British Minister about an hour later. I enclose English and Spanish texts of the statement19 which I read in Spanish to Sr. Serrato and [Page 773] which is based on the Department’s instructions as set forth in its telegram no. 341, June 23, 1943 and its instructions nos. 1650 and 1706 of September 29 and October 23. It will be observed that I refrained from mentioning specifically a three-year renewal period. This seemed distinctly advisable since it is the intention of the companies to make an initial request for five years. Naturally my statement was so worded as not to preclude my supporting a three-year renewal at a later stage if occasion arises.

In spite of the purely informal character of my action, I considered it essential that Sr. Serrato be furnished a written statement in order that the Uruguayan authorities and others concerned might be under no misapprehension as to the scope and nature of the support being given the companies. I wanted the record to be perfectly clear as respects not only what I was saying but also what I was not saying.

With regard to the action taken by the British Minister, I enclose a copy which he has kindly furnished me of his statement to Sr. Serrato.21 As noted in my telegram no. 998,21 under his instructions he is supporting a request for a renewal of the agreement for a fiveyear period. In so doing he refers to paragraph 2 of the protocol of the Anglo-Uruguayan trade agreement of 1935, the text of which I also enclose.22

In conclusion, I may add that in my interview with him Sr. Serrato said nothing of any significance regarding the matter in hand, although he did remark that he was not in favor of disturbing the present situation. My British colleague informs me that his communication likewise elicited from the Minister no comment of interest.

Respectfully yours,

William Dawson
  1. Neither printed.
  2. Not printed.
  3. Uruguayan Minister for Foreign Affairs.
  4. Not printed.
  5. Not printed.
  6. Not printed.
  7. For text of the agreement signed at London, June 26, 1935, see League of Nations Treaty Series, vol. clxxvi, p. 153.