411.006/7–1753

Memorandum by the Special Assistant to the Assistant Secretary of State for Inter-American Affairs ( Woodward ) to the Under Secretary of State ( Smith )1

confidential

Subject:

  • Venezuelan Ambassador’s call on you.

Discussion:

On instructions from his Foreign Office, Dr. César González, the Venezuelan Ambassador, has asked to see you briefly regarding a petroleum problem. His call undoubtedly relates to the Simpson Bill, HR–5894,2 which would restrict U.S. imports of petroleum and fuel oil. This bill would violate the present Supplementary Trade Agreement with Venezuela concluded last August, and would cause about a $300 million cutback in Venezuela’s annual crude oil production, thereby affecting the Venezuelan Government’s revenue (65% of which comes from oil) and its receipts of dollar exchange (95% of which come from oil.)

We are of course aware of the damage such legislation would do to our own security and commercial interests and our over-all relations with Venezuela. The Department has repeatedly made its views known to Congress with respect to this and similar proposed legislation, and is following the progress of the Simpson Bill very closely. It is possible that HR–5894 will be passed by the House this week. It is not anticipated that it will be acted upon in the Senate.

President Pérez Jiménez and Foreign Minister Otañez on June 25 mentioned to Dr. Milton Eisenhower their earlier concern over proposals in the U.S. Congress for restrictions on oil imports. However, both officials expressed confidence that the threat of such legislation [Page 1653] had largely passed and stressed that they understood clearly, as Dr. Eisenhower had pointed out, that it was the policy of President Eisenhower and his administration to oppose such legislation.

It is apparently the intention of the White House to do nothing directly to deter protectionist elements from airing their views in Congress. The State Department has, with White House approval, clearly indicated to Congress its opinion that this legislation will have a unfavorable effect on relations with Venezuela and other countries.

The Ambassador may possibly be concerned over a Joint Resolution (SJR–90) which would nullify the present 5¼¢ tax on petroleum products from Venezuela. The Department’s opposition to this bill is also being prepared in response to an inquiry from the Senate Finance Committee.

Recommendation:

It is recommended that you receive the Ambassador and that if his concern relates to the Simpson Bill, you assure him of the Department’s continued opposition to this measure and of its belief that it will not pass both Houses of Congress. You may wish to add that the Administration is firmly devoted to promoting trade, not additional protectionism. The President’s views on this subject are clear, and we have been advised that it would be best to use our most emphatic representations to the Congress in only those instances where there is imminent likelihood that the proposed restrictions might actually become law.3

  1. Drafted by Bainbridge C. Davis and approved by Mr. Atwood.
  2. Representative Simpson introduced H.R. 5894 on June 23, 1953. The bill was designed to amend the Trade Agreements Extension Act of 1951, by imposing quotas on petroleum imports and a sliding scale tax on lead and zinc imports. For a summary of the bill’s provisions and the views of the Department of State opposing the bill, see Congressional Record, 83d Cong., 1st sess., vol. 99 (pt. 7), pp. 9637–9642. The bill was debated and recommitted to the House Ways and Means Committee on July 23; it was not enacted into legislation.
  3. Ambassador González met with Under Secretary Smith on July 20, 1953; the memorandum of their conversation, dated July 20, drafted by Mr. Woodward, is not printed (Secretary’s Memoranda of Conversation, lot 63 D 75, “May–September 1953”).