860h.6363/12–145: Telegram
The Acting Secretary of State to the Ambassador in Yugoslavia (Patterson)
460. Reurtel 707, Dec 1.99 With termination Nov 1 of all limitations on petroleum supplies and tankers,1 no basis for approach to Yugo Govt on petroleum supply arrangement now exists. Nor is this Govt prepared to threaten to withhold oil supplies from UNRRA as a means of forcing Yugo Govt to restore Standard-Vacuum’s2 properties and business.
You are instructed, however, after consultation with Petroleum Adviser Francis Smith to discuss the Standard-Vacuum problem with Yugo Govt and present a memorandum along following lines.
First, you should make it clear that apparent Yugo policy of leaving undisturbed Standard-Vacuum’s American ownership while ruining the company’s business is not acceptable to this Govt. Accordingly this Govt urgently requests Yugo Govt, a) to return promptly the [Page 1300] properties of Standard-Vacuum,4 b) to restore the competitive opportunities which the company enjoyed throughout Yugoslavia before the war and c) to give the company access on an equitable basis to the restricted volume of current imports of petroleum.
Second, you should state that if Yugo Govt is not prepared to return the company’s properties and to permit it to function on a competitive basis as before the war US Govt will expect Yugo Govt to expropriate the company and make prompt payment in dollars for it on the basis of its full worth as a going concern.
For your information we are advised that cash funds of Standard-Vacuum are almost exhausted as company has had practically no operating income since creation of Yugo-Petrol in May. We are also advised that Yugoslav Govt owes the company substantial dinar amounts on which it has been delaying payment. If Smith confirms this is present situation you are requested to press Yugo Govt to pay to Standard-Vacuum whatever amounts are due in order to provide company with funds to meet payrolls and other current expenses until above mentioned problems concerning company’s disposition have been settled.
Dept requested Brit here to ascertain whether Brit Govt prepared to make similar representation to Yugo Govt. They still are without instructions but are informing MFP5 London Dept is sending this message without further delay and that you will withhold action for few days to give Brit Emb Belgrade time to receive instructions from London. If such instructions are not forthcoming promptly, or suggested approach does not have Brit concurrence, you are instructed to proceed without them on basis above instructions unless in your judgment some other procedure now is more advisable.
- Not printed.↩
- The Petroleum Administration for War ordered all restrictions on the foreign supply and transportation of petroleum products lifted on November 1. The purpose of this measure was to return petroleum transactions to normal commercial channels. Foreign dealers could now buy petroleum products when they wished and ship them by chartered tanker. An export license was still required, however, to ship petroleum products out of the United States. (See the New York Times, October 29, 1945, p. 21, col. 3.)↩
- The Socony-Vacuum subsidiary in Yugoslavia.↩
- Telegram 517, October 1, 1945, from Belgrade, reported that the Yugoslav Ministry of Mines had taken over the operation of the Standard-Vacuum refinery in Bosanski Brod, despite the fact that there was no law supporting such action. The former management of the company was forbidden any sort of contact with the refinery. A state petroleum monopoly, Yugo-Petrol, had also been created which had the exclusive rights to sell petroleum products in Yugoslavia received from UNRRA or other sources. Private companies, thus deprived of the right to sell in Yugoslavia, were furthermore not compensated for transportation and other services they were compelled to render to Yugo-Petrol. Again, there was no legal basis for this action on the part of the Yugoslav Government. (012.3/10–145)↩
- Ministry of Fuel and Power.↩