197. Editorial Note

On February 1, in a conversation in Washington with British officials, Acting Secretary of State Hoover discussed the problem created for the United States by foreign firms contracting for oil sales in this country at prices below current levels. Hoover explained some of the domestic political dimensions of the question of oil imports to C.A.E. Shuckburgh, Assistant Under Secretary of State in the British Foreign Office, and to Sir Robert Scott, Minister in the British Embassy, as follows: [Page 520]

“There has been a continuous fight between domestic producers and importers over a period of at least 25 years, during which time there have been a number of ups and downs. The problems of oil imports flared up again in a serious form in 1954 and domestic producers, joined by coal and labor, are making a determined effort to secure restrictions. The output of the coal industry is depressed from almost 700 million tons production annually shortly after the war to less than 400 million tons. This is a matter of concern from the standpoint of defense. If coal production drops to too low a level mines are lost from premature abandonment, encroachment of water, and other factors and there would need to be a substantial increase in coal production in an emergency. We have been trying to prevent the enactment of tariffs or the imposition of quotas in this situation. It was only as a result of the establishment of the Cabinet Committee on Energy Supplies and Resources Policy that Congressional committees refrained from conducting investigations of the whole problem at the last session of Congress. The Cabinet Committee is going to say that imports should be kept at reasonable levels by voluntary actions by the industry. There are two reasons for the Government not intervening in the situation. One is because of GATT and our trade agreements and the other is the fact that the industry itself does not want any kind of Government regulation.” (Memorandum of conversation, February 1; Department of State, Central Files, 811.2553/2–155)