871.6363/11–344: Telegram
The Secretary of State to the Ambassador in the Soviet Union (Harriman)
2848. ReEmbs 4590 and 4591 December 1. The reply of the Soviet Government to the Embassy’s letters of November 10 and 28 covering the removal of petroleum equipment from Rumania does not, in the Department’s opinion, answer satisfactorily the points set forth in the Department’s 2629 November 8 which were transmitted to the Soviet Foreign Office in your letters. While we welcome the Soviet Government’s concurrence, which is implied though not stated clearly, in the proposition that the rehabilitation of the Rumanian oil industry [Page 284] is of overriding importance, the Department cannot agree that the disposition and allocation of the existing machinery and equipment necessary to carry out such rehabilitation and the decision on what equipment should be removed from the country are matters for the unilateral decision of the Soviet authorities.
The Department has received from Berry a summary account of General Schuyler’s interview with Vinogradov on November 26 (reEmbs 4552, November 28). Berry, who had received from the Department the same instructions as were given to you in Department’s 2629 November 8, had previously stated to Vyshinsky this Government’s position on the matter of the removal of oil-field and refinery equipment from Rumania. Both Schuyler and Berry are completely informed but neither they nor the British representatives have been able to make any headway with the Soviet authorities in Rumania. Latter have declined to stop the loading and removal of equipment. Vinogradov stated he did not have authority to stop it. Vyshinsky has maintained that the equipment is war booty, a view which has been emphatically rejected by the American and British representatives. Vyshinsky has stated his agreement, however, to the principle that the Rumanian oil industry should be quickly rehabilitated.
This Government cannot accept the view expressed by Soviet officials that the equipment of American or other oil companies in Rumania may be considered as war booty under the armistice. The protocol to the Rumanian armistice, signed by Ambassador Harriman, Clark-Kerr and Vyshinsky, specifically states in its clause no. 2 that the term “war material” used in Article 7 “shall be deemed to include all material or equipment belonging to, used by or intended for use by enemy military or para-military formations or members thereof”. The purpose of this provision was to guard against any interpretation of the term “war material” as including other types of enemy property such as factories, industrial equipment and the like. The Department regards as even more unwarranted any interpretation of Article 7 which includes the property of American subsidiaries, especially fixed and essential refinery machinery, under the term “war material of Germany and her satellites”.
While it may be that certain stocks of tubing brought to Rumania by the Germans are not needed for current and future operations, the information which has reached the Department from British sources and from officials of Romano-Americana indicates that the Soviets took entire stock of many important items, loss of which would have disastrous effect on Rumanian oil production. Romano-Americana officials reported that Russians had taken line pipe, well casings, tubing, drill pipe, sucker rods for pumping wells and tool joints [Page 285] for drilling well, but that no inventory equipment or refinery replacement parts had been taken in the period before November 2, when loading at Romano-Americana stopped temporarily. Caserta’s 1559 November 30 repeated to you as 152 indicates loading of tubing and casting was resumed on November 26.
All conversations held with Soviet officials up to the present have revealed wide disagreement as to the facts. In the Department’s opinion we can hardly reach a satisfactory solution of the matter with the Soviet Government until there is available factual information compiled and agreed to by representatives of the three Allied Governments after study of the situation on the ground. The Department is arranging to send to Rumania as soon as possible a petroleum expert to serve on Berry’s staff, and the War Department is assigning to General Schuyler’s staff a colonel who has been associated with the petroleum industry.93 They should be of service in any such investigation.
In view of the great importance of this matter, the Department desires you to take it up personally with the Soviet Government, in the manner you consider most effective. You should state this Government’s firm position on the two major questions of principle involved; namely (1) the importance to the Allied war effort of the early rehabilitation of the Rumanian oil industry, using arguments set forth in Department’s 2629 November 8 and (2) the obligation of the Soviet Government to respect American property interests in Rumania. Pending the examination of factual and technical findings, it would be better not to discuss the type and ownership of the goods actually taken, but if the matter is raised you should point out that reports reaching your Government indicate that essential equipment has been taken from the properties of American-owned companies. As a practical way out of the present impasse you should request that all loading and removal of equipment be stopped immediately and that the Soviet Government agree to the appointment of a tripartite commission of oil experts to survey the entire position of the Rumanian oil industry, particularly from the standpoint of production, and to state what measures are necessary for its rapid rehabilitation. Such a survey should show what materials already removed should be returned and whether there are any materials which are not needed for present operations or as replacements.
The British Embassy has made available to the Department a copy of the Foreign Office instructions on this matter to Clark-Kerr, summarized in your 4798 December 12,94 and has asked whether the Department [Page 286] was sending similar instructions to you. The British argument lays considerable stress on the point that the property taken is not German but that of Rumanian companies in which British capital is heavily involved, and that the Russians have no right to confiscate such property irrespective of any question of its control by Germany during the war. The Department prefers for the present to avoid discussion of the legal question of title to the property taken and to concentrate on the question of the maintenance of production and the principle of joint rather than unilateral decisions on a matter which is of such importance to the common war effort, particularly when it involves property in which there is an American interest. Your approach to the Soviet Government should therefore be independent of the British approach.