865.6363/12–645: Telegram

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

3919. Ref mytel 3918, Dec 6.67 With specific reference to desequestration of American oil interests and in connection with present delay in enacting pertinent legislation thereto, this Embassy feels it advisable to point out to Dept certain implications concerning petroleum supplies which could result in detriment to general interest outlined below if postponement of desequestration legislation is prolonged:

Present petroleum supply program for Italy centers on Comitate Italiano Petroli (CIP) acting for Italian Govt. CIP was organized and up to December 1, 1945 generally supervised by Allied Armies through petroleum section AFHQ whose functions in Italy are now terminated. Present Italian decree provides for CIP to function only until May 1946 and there are strong indications that Italian Govt will not continue CIP existence beyond this date. (See paragraph 5 Italian note verbale Oct 26, enclosure to my despatch 2592, Nov 5.68) Consequently it is essential and economically necessary that petroleum supplies be provided through normal commercial channels at earliest practicable moment before May 1, 1946 in order that adequate time be provided American oil companies to reestablish their operations (reference paragraph 5 your telegram 1592, Sept 14).
Commercial oil supply operations are already in effect in other Mediterranean areas. These can be coordinated better with respect to tanker movements, sources of supply, general world petroleum supply features if Italy is included under similar arrangements.
Representatives of Army-Navy Petroleum Board have indicated advisability of contracting with American oil firms for supplying of petroleum requirements of remaining American forces in Italy thus terminating as soon as possible redeployment of troops now encharged with this petroleum supply responsibility.
Eepresentatives of American Commercial Aviation now being established in Italy have indicated necessity of concluding supply and service arrangements preferably with American oil firms as soon as possible.

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None of these commercial channel functions can be performed by American oil interests until desequestration of their properties is effected.

  1. Not printed.
  2. Despatch 2592 not printed; for enclosure, see supra.