893.6363/6–2449: Telegram
The Secretary of State to the Ambassador in the united Kingdom (Douglas)
2183. For Martin and McIntyre.39 Dept informed by Caltex its Shanghai office offered 3 to 5 year contract by Chi Petroleum Corp for delivery annually minimum 75 thousand tons maximum 150 thousand [Page 1017] tons crude oil to refinery Hulutao. Info recd by company from Shanghai indicates Anglo-Iranian willing conclude contract if Caltex refuses. Dept has indicated in discussions with Caltex representative that it is considered premature to rush into long-term contracts with Chi Commies but recognizes possibility bargaining power US wld be increased if some oil delivered thus causing Commies to rely on Western sources which cld be cut off shld conditions warrant. Caltex proposes reply to CPC that in view unsettled situation in China it does not wish enter into formal long-term contract but is willing continue present shipments to Hulutao insofar as possible under existing terms. Shld Anglo-Iranian offer definite long-term contract to CPC it wld likely be accepted, thus depriving CalTex business. CalTex has until June 30 to make reply to CPC.
In view above circumstances matter shld be discussed with Brit with view to agreeing on common course of action. CalTex indicates willingness compete for business with Anglo-Iranian on equal terms but does not wish be placed in inferior position by refusing to conclude long-term contract if Anglo-Iranian not so inclined. Your comments and those of Brit urgently requested.
- Edwin M. Martin, Acting Director of the Office of International Trade Policy, Department of State, and Francis E. McIntyre, Assistant Director of the Office of International Trade, Department of Commerce, on a mission to the United Kingdom to discuss technical aspects of trade policy in regard to Communist-occupied China; for correspondence, see pp. 817 ff.↩