810.6363/12–2948: Circular air gram

The Acting Secretary of State to Diplomatic Representatives in Certain American Republics 1

Subject: Recent Press Reports and Official Comments on U.S. Government Oil Loans for Latin American Countries

An article appeared in the New York Times of December 8, 1948, page 13, entitled “U.S. Shuns Helping Latins Exploit Oil”, written by Milton Bracker under Buenos Aires dateline of December 7. The article stated that a policy of no loans to Latin American nations for [Page 256] oil development was laid down at a recent U.S. foreign service conference in Río de Janeiro to discourage Venezuela from thinking in terms of nationalization.

A summary of the New York Times article also appeared in the Soviet press of December 10, in which the Soviet writer attempted to link the recent Venezuelan revolution with the decision allegedly made by the foreign service conference at Río in November regarding U.S. loans to Latin American countries for petroleum development.

On December 8 the press queried Under Secretary of State Lovett and Assistant Secretary of Commerce Blaisdell on the article which appeared in the New York Times. The press was informed that the Río conference was convened for the purpose of interchanging views between the Department and the missions and not for the purpose of formulating policy. The press was informed further that the Department believes that the best way to obtain petroleum development is by private enterprise.

The query by the Press and reply by the Under Secretary are as follows:

“Q. Mr. Secretary, there is a report from Buenos Aires that the United States will not make loans to South American countries for oil developments. The report says that this was discussed with chiefs of missions of the United States at a regional meeting at Rio.

A. That was shown to me this morning and the report is quite erroneous as to the basic facts. Officials of the Department in connection with economic representations did meet in Río but oil, petroleum products, was not on the agenda at all.

As to the second part of the question, the policy of the United States Government has been consistently not to make loans of this character because private enterprise is, in the first place, better equipped technically and better equipped from the point of view of ability to look into this and it has always had adequate capital to handle those transactions. There is nothing new in that and it has been repeatedly stated by this government both before the ITO and the United Nations Committees.”

The statement to the press made by Assistant Secretary of Commerce Blaisdell is as follows:

“The conference at Río was not held for the purpose of forming policy. It was a meeting of officials from Washington with senior officers from United States embassies in Latin America. They met to discuss the United ‘States interest in economic development and trade throughout the hemisphere. Numerous points of view were expressed. There was no ‘prevailing’ opinion at the conference about the steps that might be taken to promote oil development in Latin America. The general point of view of the United States Government with regard to the advantages of private trade and investment is well-known. [Page 257] Equally well-known is its policy of non-interference with the political determinations made by other governments concerning their own internal affairs. Coordinating these general policies with the particular conditions in the oil industry in particular countries is a basic task in the administration of our foreign policy.”

  1. Sent to the Embassies in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela.