832.6363/2–1447

The Chief of the Petroleum Division (Loftus) to the Petroleum Attaché in Brazil (Harmon)

confidential

My Dear Mr. Harmon: Your letter of January 17, 194739 indicates that you have some misgivings in the interpretation of the Department’s telegram no. 1566 of December 27, 1946,40 it being your feeling that postponement of any action by the Embassy concerning petroleum legislation until that legislation may be ready for consideration [Page 459]by the Assembly would be prejudicial to our overall interest in the law.

In suggesting, in the above-mentioned telegram, that official sponsorship should not be given to any draft legislation and that official comment should not be made upon it until the draft is ready for legislative action, it was intended to imply a differentiation between a formal endorsement and informal action.

There was no intent to suggest that the Embassy should not continue to interest itself actively in the passage of this legislation nor that it should discontinue or abate in any way such informal guidance or opinions as it might be able to offer those framing the law. This latter activity is highly desirable and should be continued with all means at the disposal of the Embassy short of formal representation or comment.

The Department feels that were it to give official endorsement to the legislation or, in the name of this Government, make official comment on its provisions, such overt action could readily be misinterpreted by nationalistically inclined elements and as easily interpreted by them as being distinct interference on our part in matters of national competence. This may be, perhaps, a too cautious view of the possible results of such action, but there exists certainly the possibility which, should it become a reality, could be most embarrassing.

I believe that you should, with the Ambassador’s concurrence, continue to make use of all of your valuable associations with those in any way responsible for the drafting of this legislation and, where appropriate, accord them the advantage of your professional judgment as well as your knowledge of this Government’s attitude. In so doing, however, it is still felt here that the approach should continue to be on an informal basis.

If situations should arise where you and the Ambassador feel that it is necessary to make formal representation, the Department would like to be apprised of the circumstances in order that a common understanding of the approach may be arrived at.

Sincerely yours,

John A. Loftus