810.20 Defense/3–1748

The Secretary of Defense ( Forrestal ) to the Secretary of State

confidential

Dear Mr. Secretary: Receipt is acknowledged of your letter of 4 March 19481 outlining your plans with respect to strategic resources in so far as the Ninth International Conference of American States2 is concerned.

Recent discussions between representatives of the National Military Establishment and Ambassador Pawley3 have revealed, what we have [Page 238] assumed to be, the Department of State’s program for making loans available to Latin American countries in conjunction with the elimination of existing discriminatory laws toward foreign capital on the part of the countries concerned. In exchange for this latter concession, it is my understanding that efforts will be made to obtain Congressional action to grant corporations operating in Latin America tax incentives such as were included in the China Trade Act.4

Ambassador Pawley and other representatives of your Department have expressed the feeling that the introduction of specific resolutions emphasizing the security aspects of strategic materials might operate to jeopardize the program. This opinion has been reaffirmed in your letter to me of 4 March 1948. Consequently, the National Military Establishment will no longer press for the adoption of a strategic resources resolution at Bogotá. Because of the immediate urgency of the petroleum problem,5 I would like to see the resolution that you, inclosed with your letter adopted at Bogotá and hope that conditions at the conference will be such as to permit its introduction.

In my letter to you on 1 December 1947,6 I suggested the formation of a special interdepartmental study group on strategic materials to work out detailed programs for Latin America much as is being done in connection with the European Recovery Program. The decision not to introduce any resolution at Bogotá on strategic resources other than petroleum does not alter, in my opinion, the requirement for the early formation of such a group. It is my understanding that a more detailed suggestion along this line has recently been made to Mr. Thorp7 of your Department by the Chairman of the Munitions Board. Also all data in the hands of the Munitions Board concerning requirements and possibilities in Latin America are currently being made available to your Department.

I am becoming increasingly concerned about the problem of assurance of availability of all materials essential for a war economy, whether presently listed for stockpiling or not. Your interest and cooperation in this matter of vital importance to the security of the nation are appreciated.

Sincerely yours,

James Forrestal
  1. Not printed.
  2. For documentation on the Conference at Bogotá, March 30–May 2, 1948, see pp. 1 ff. Secretary Marshall informed Secretary Forrestal in his letter of March 4 that the Department of State felt that it would be unwise for the American Delegation at Bogotá to introduce any resolution on strategic resources, since the Basic Agreement on Economic Cooperation, which the Conference was to conclude, would provide an adequate multilateral basis for the development of strategic resources, and for the conclusion of any bilateral agreements that might be desirable (810.20 Defense/12–247).
  3. William D. Pawley, Ambassador in Brazil; member of the United States Delegation, Bogotá Conference.
  4. For text of the China Trade Act, approved September 19, 1922, see 42 Stat. 849.
  5. For documentation on United States interest in petroleum resources in the Western Hemisphere, see pp. 243 ff.
  6. Not printed.
  7. Willard L. Thorp, Assistant Secretary of State for Economic Affairs.