Foreign Relations of the United States, 1952–1954, Indochina, Volume XIII, Part 1

851G.131/10–2853

Memorandum of Conversation, by Francis G. Jarvis of the Office of Philippine and Southeast Asian Affairs

confidential

[Washington,] October 28, 1953.

Subject:

• Plan for Allocation of Foreign Exchange to Petroleum Companies in the Associated States

Participants:

• Standard Vacuum Oil Company:
• Mr. Eichholzer
• Mr. Ulrich
• Mr. Geddes
• Department of State:
• PSA—Mr. Bonsal
• PED—Mr. Eakens¹
• PSA—Mr. Getz
• PSA—Mr. Jarvis
• FOA:
• Mr. Morrison²
• Mr. Tannhauser

Following the usual exchange of pleasantries, Mr. Bonsal invited the Standard Vacuum Oil Company representatives to open the discussion. Mr. Eichholzer³ outlined details of the French OCLL decree of 1939, which was reaffirmed in 1946, and provides the basis for imports of petroleum by the several companies in Indochina. He said that under this decree the petroleum trade in Indochina is divided among the three marketing companies on the basis of their average sales in 1937, 1938, and 1939. No new companies may enter the market. Stanvac became restive with this situation and notified OCLL of its intention to withdraw, preferring a system of competition. Believing that there had to be an alternative to the OCLL plan, Stanvac suggested that the Petroleum Branch of the Foreign Operations Administration develop a plan to replace the OCLL import control plan. Stanvac endorses the plan which FOA has developed.

Mr. Morrison briefly outlined the FOA plan. (See Musto A128, September 19, 1953⁴) Mr. Eichholzer went on to say that the Ambassador at Saigon and Mr. McClintock of the Embassy had suggested to him that he outline for Mr. Bonsal impressions he had obtained at Saigon. Mr. Eichholzer gathered the impression that the FOA plan, in order to succeed in the Associated States, would have to be “pushed” by the U.S. Government. Mr. Eichholzer continued that the Minister of Commerce has received the plan from the FOA Mission and it is under study in his Department.

Mr. Bonsal said that he was not familiar with the technical aspects of the plan but from the brief outline of the plan presented at this meeting, it did not appear to him that the subject plan would cause concern in a normal situation. However, Mr. Bonsal expressed the opinion that the U.S. should not do anything which will divert attention of the people of Indochina from the main objective at present, which is to win the war. Mr. Bonsal also noted that even if the U.S. Government supports this plan with the four governments concerned, it is his opinion that the adoption of such a plan in Indochina will be a slow and complicated matter. Following a discussion of approximately one hour, Mr. Bonsal said that the Department will continue to follow developments in connection with this plan. He said that he was glad to have had the benefit of the views of the Standard Vacuum Oil Company representatives. Mr. Bonsal expressed his thanks to the Standard Vacuum Oil Company representatives and on this note the meeting ended.

1. R. H. S. Eakens, Chief of the Petroleum Staff.
2. Clinton Morrison, Deputy Regional Director, Office of Far Eastern Operations, Foreign Operations Administration.
3. Eichholzer had recently spent 11 days in Saigon. He briefed Bonsal on his visit on Oct. 27, reporting that the outlook of the French business community was very pessimistic. The memorandum of this conversation by Getz of PSA is not printed. (WE files, lot 54 D 467, “Indochina”)
4. Not printed.