The Acting Secretary of State to the Secretary of the Navy (Forrestal)

Dear Jim: I am taking this opportunity of answering your letter of April 5, 1946 addressed to Secretary Byrnes on the subject of the Anglo-American Oil Agreement and the limitations of American oil reserves.2

As you know the Oil Agreement is now before the Senate Foreign Relations Committee.3 No definite date has been set for hearings and we have been somewhat hesitant to ask for its consideration until such time as the British-American loan4 is out of the way. It is my opinion that the successful approval by the Congress of the British loan is of the utmost importance and I would not want to take any action that might jeopardize its success. Therefore, it has seemed to me advisable to postpone immediate hearings on the Oil Agreement.

I note your concern over the possible limitations of American oil reserves from the standpoint of our long term security. This question is a very controversial one as is evidenced by some of the testimony brought out at the hearings of the Special Committee Investigating Petroleum Resources under the Chairmanship of Senator O’Mahoney.5 However, the problem has recently come to the attention of the State-War-Navy Coordinating Committee and an ad hoc Committee has been appointed to investigate the matter as well as to look into the possibility of increasing the potential reserves in the Caribbean area. Mr. Charles Rayner of the State Department is the steering member of [Page 1380] this Committee and Commodore Greenman and Captain Dennison represent the Navy Department. I feel sure that the Committee will give every consideration to this complicated problem.6

Sincerely yours,

Dean Acheson
  1. Not printed.
  2. Documentation regarding the negotiations in 1944 leading to the conclusion of the Anglo-American Oil Agreement (signed August 8, 1944) is found in Foreign Relations, 1944, vol. iii, pp. 94 ff. It was sent to the Senate by President Franklin D. Roosevelt on August 24, 1944. A bracketed note, ibid., 1945, vol. vi, p. 244, describes 1945 events relating to the agreement.
  3. This refers to the financial agreement concluded between the two governments on December 6, 1945; documentation is found in ibid., pp. 1 ff.
  4. For a bibliographical note on the records of the special committee, see National Archives, Preliminary Inventory of the Records of the Special Committee of the Senate To Investigate Petroleum Resources, 1944–46. (Record group 46, compiled by George P. Perros) (Washington, Government Printing Office, 1953)
  5. The records of the ad hoc committee are found in the 289 Series of the general file of the State-War-Navy Coordinating Committee located in the National Archives of the United States. The ad hoc committee was appointed on April 22, 1946 and had its first meeting on April 24. Its first report, a preliminary report, was submitted to the plenary Committee (SWNCC) on April 29 (document SWNOC 289/1).