865.6363/8–2045: Telegram

The Secretary of State to the Ambassador in Italy (Kirk)

1395. Dept’s circular airgram Mar 352 on Establishment of an Arrangement for Supplying Essential Petroleum Requirements for Liberated European Countries. Dept now desires you, in accordance with those instructions and after consultation with Brit Emb, to invite Italian Govt to participate in the Petroleum Supply Arrangement, It is hoped no delay will be involved either in presentation of the Arrangement to Italian Govt or in their reaching a decision and taking necessary steps.

The time elapsed since Mar 3 necessitates making three changes in airgram which you are requested to take into account in presenting its substance to the Italian Govt.

References contained in paragraph 6 to Anglo-American Oil Allocating Board should not be included. Thought to be conveyed is that US and Brit Govts will determine currently amount of petroleum that will be made available to meet essential Italian requirements, due regard being had to demands of the war and to essential civilian needs of other countries. It is felt unnecessary to describe machinery by which decisions are reached by American and British Govts.
As the Comitato Italiano Petroli has now been legalized by decree, this committee should be mentioned specifically wherever throughout the airgram, and particularly in paragraph 8, reference is made in general terms to local petroleum industry or national pool committee.
Supply committees referred to in paragraph 7 which it is stated would be established in United States and Great Britain have now been established.
[Page 1315]

In connection your discussion of petroleum supply arrangement you are requested to state that US Govt looks to Italian Govt for satisfactory assurances on following three matters: a) that properties of petroleum companies in which American nationals are interested will be promptly returned to their owners, as provided for under the de-sequestration decree; b) that American interests in CIP will be given a fair share of the total business so that when the operation of a pool is no longer necessary and competition is restored, American-owned companies may enter that period in approximately the same position relative to Italian and other foreign-owned concerns which they held at outset of period of severe discrimination under Fascist regime; and c) that AGIP, whatever its future status may be, will not enjoy preferential treatment such as was given to it, to detriment of American interests, under Fascist Govt.

The purpose of point b) above is to provide that when pool controls are removed American interests as a whole should be in possession of a fair proportion of the total Italian business judged in relation to some previous representative period. For your information and use in discussions with Italian Govt, we believe that 1933, as it precedes the period of extreme discrimination under Fascism, represents a fair base year for calculating distribution of business between Italian, American and other foreign interests. After the pool controls are removed it is this Govt’s hope and expectation that Italian Govt will allow fullest possible measure of competition to exist in oil industry and will permit other American companies, if any so wish, to enter Italian market.

  1. Not printed.