740.00112A European War 1939/30776

The Chargé in Venezuela ( Flack ) to the Secretary of State

No. 4383

Sir: I have the honor to refer to the Department’s Airgram No. A–164 dated October 26, 1942, 6:35 p.m., Embassy Despatch No. 3853 [Page 837] dated January 23, 1943,90 Departments Airgram No. A–537 dated April 27, 1943, 6:45 p.m. relative to the matter of American Oil Companies or their subsidiaries being obliged to furnish domestically processed products to Proclaimed List Nationals.

Although conditions prevailed in 1942 prompting the licensing of American Oil companies or their subsidiaries in Venezuela to furnish domestically processed products to Proclaimed List Nationals, it was anticipated that effective control as contemplated by Resolutions V and VII adopted at the Washington Conference on Systems of Economic and Financial Control would solve the problem. Such hopes were ill founded and efforts toward more effective control unavailing, so much so that in January, 1943, the Embassy was obliged to permit the sale of fuel oil to Gustavo Zingg y Cia., (PL) Maracaibo, in excess of its monthly allowable amount based upon statistics beginning in January, 1939. (See Embassy Despatch No. 4003 of February 13, 1943.)91

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It appears that little can be said for continuing the practice of licensing the sale of domestically manufactured products to those persons and firms not essential to the local economy and the present licensing practice to those enterprises which may be considered essential to local economy is hardly satisfactory in that there is no effective control over these firms under existing Venezuelan Decrees, nor is there the disposition to forcibly eliminate the undesirable interests therefrom.…

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Respectfully yours,

Joseph Flack
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