The Acting Secretary of State to the Secretary of Commerce (Sawyer)

My Dear Mr. Secretary: It is my understanding that you and Secretary Marshall, following a conversation with Mr. Benjamin Fairless on September 16th1 regarding the development of the iron ore resources in Venezuela, agreed that each Department should designate an officer to devote his entire time for the moment to consideration of the attitude of this Government toward this matter; whether as a consequence we should accord favorable consideration to Venezuela in the matter of iron and steel or other allocations, and what should be our long-term policy respecting this question.

The Department of State has designated Mr. Sheldon T. Mills, Chief of the Division of North and West Coast Affairs, for this task. It would be appreciated if you could advise me of the name of the official of your Department who has been named to work with Mr. Mills.

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In this connection I understand that the Operating Committee of the Advisory Committee on Requirements, charged with the determination of export licensing policy, decided on September 16th to endorse the Venezuelan public works program as a project which will be given especially favorable supply treatment in the light of considerations of high national policy. This decision was reached, I believe, because of the vital importance to the United States of Venezuelan petroleum production. High Venezuelan officials have repeatedly made it clear to this Department that unless they can convert a portion of their share of petroleum profits into urgently needed public works they see no reason why they should encourage the expansion of petroleum operations. Our interest in the extensive ore deposits of Venezuela, which involves operations of the Bethlehem Steel Corporation as well as the United States Steel Corporation, emphasizes the wisdom of the decision to accord specially favorable consideration to the exportation of iron and steel for the Venezuelan public works program.

While the basic decision in this matter appears to have been made by the Operating Committee, it is the opinion of this Department that those charged with carrying it out should constantly bear in mind the important policy objectives involved.2

Sincerely yours,

Robert A. Lovett
  1. Memorandum of conversation with the President of the U.S. Steel Corporation not printed.
  2. In a memorandum of December 20, not printed, Mr. Mills informed Mr. William J. McWilliams, assistant to the Director, Executive Secretariat, Office of the Secretary as follows:

    “I have recently been informed that the Office of International Trade, Department of Commerce, issued on December 11, 1948 special project licenses covering exports for the Venezuelan public works program. These licenses authorize shipment of the necessary materials for the construction of schools and other public buildings, hospitals, highways, dock facilities, bridges, airports, irrigation facilities and housing in Venezuela.” (831.0511/10–748)