Memorandum of Conversation, by the Chief of the Division of North and West Coast Affairs (Flack)

Participants: Señor Don Arturo Lares of the Venezuelan Embassy
Señor Dr. Don Pedro Aguerrevere of the Venezuelan Embassy
NWC—Mr. Flack

Señor Lares came in this morning to ask informally and personally how matters re possible recognition were going. I said we had received replies from about a dozen of the American republics and that probably by early next week we would have the rest of them in and we could then see where we stood.

I took advantage of the presence of Lares to refer to the question of the attitude of the new group in Venezuela toward the petroleum industry and its existing contracts under the 1943 law. Lares said he firmly believed that all such contracts would be honored scrupulously. I mentioned that we were considering for the purpose of clarity in this matter, asking Dr. Corrigan to have a personal and informal talk with Señor Betancourt as soon as possible to get an oral expression of his views on the matter, which I felt would be a great contribution to the economic relations between Venezuela and the United States, which are very important in both directions. Lares then called Pedro Aguerrevere on the phone and asked me to speak with him. Aguerrevere, although nominally Financial Counselor, is also in effect a petroleum counselor and handles such matters in the Embassy. I have known him several years and was well acquainted with him in Caracas and I spoke very frankly to him suggesting the desirability, for future understanding, of having the views of Señor Betancourt clarified informally and orally at this time. He said he favored such a frank discussion now, while holding the opinion that all contractural agreements are valid. He said he personally considered that the 1943 petroleum law was adequate, but that of [Page 1413] course the new Government might pass a new law and that if any adjustments were necessary these could be made in a friendly manner. Both men insisted that as far as they knew no drastic action is contemplated in Venezuela with regard to the petroleum companies.

Señor Lares said he would advise Señor Betancourt by cable that Dr. Corrigan might seek an informal conversation with him, with no implication of recognition, to secure his views orally on the matters we had discussed.

The tenor of my remarks to Lares and Aguerrevere throughout was that we do not anticipate infringement of the 1943 law but feel that perhaps frank discussion now may obviate a lot of misunderstanding in the future. The conversation was on a most friendly and unofficial basis and predicated on the knowledge of both men of my own friendly sentiments toward Venezuela.