Pauley Files

No. 626
The Deputy Petroleum Administrator for War (Davies) to the Representative on the Allied Commission on Reparations (Pauley)

My Dear Mr. Pauley: I have just been talking with Colonel Fogelson about the tightness of our United Nations oil program for the next year or eighteen months and have mentioned, in particular, the disappointment we feel over not having made available for United Nations use the production and refining capacities of Rumania, Austria and Hungary.

I cannot understand why the oil resources of these countries should be monopolized by the Russians, particularly in the light of the fact that American and British companies have an actual ownership of substantial proportions in the oil and the plants in these countries and the further fact that the U. S. A. is continuing to export a large volume of petroleum products to Russia.

The figures in the memorandum attached1 will give you some idea of the volumes involved. The figures themselves do not look so large in relation to the supply and demand volumes world-wide, but we are operating practically without margin today and every barrel counts. Further, the location of this petroleum is such as to make for important transportation savings, as well, if it were made available in the program. Beyond this, there is the very pertinent point of the equities involved; the American public would have difficulty in understanding why American oil should be withheld by Russia from United Nations use while, at the same time, this country goes on exporting to Russia.

I do not know to what extent this situation is properly related to reparations, but I hope you will see some opportunity to advance our interests by one means or another.

With best personal regards [etc.]

R. K. Davies
  1. No such memorandum is attached to the original of Davies’ letter. Cf. annex i to document No. 1321, printed in vol. ii .