252. Memorandum From the Director of the Office of South American Affairs (Bernbaum) to the Acting Assistant Secretary of State for Inter-American Affairs (Rubottom)1
SUBJECT
- Petroleum Problem
Bob Rutherford has just informed me of the following. He had attended the President’s Advisory Committee on Energy, Supplies and Resources Policy which took place this morning at 10:30. Gordon Gray announced at that time that he was in the process of certifying to President Eisenhower that petroleum imports had reached a level high enough to jeopardize the national security. Mr. Gray confirmed to the Secretary at a later meeting that he had already made this certification to the White House.
Rutherford was told this afternoon by Dillon that Gray had admitted that the certification to the President was the outgrowth of a political commitment made to the independents last fall. According to Gray, as reported to Rutherford by Dillon, the next step will be the White House investigation of the facts. Gray has already submitted to the White House a panel of five people, all from industry and not in any way connected with petroleum, from which the President may select his investigators. Gray’s estimate was that the investigation would take several months. He expects during the [Page 677] interim period to work with the petroleum companies on further voluntary limitations of imports.
An announcement regarding Gray’s certification is to be made tomorrow morning at 10:30. I have, therefore, arranged to let Ambassador Gonzalez2 know about this today in order that he may get the information to his government before the announcement. Bob Rutherford will sit in with me at the meeting.3
Preliminary reactions to the above gambit are not nearly so discouraging as one might think. As it looks today, the new investigating committee offers the opportunity for a new look at the 1954 formula, which is the basis of our present day troubles, and the possibility of its revision in the light of events indicating that the country could stand a great deal more in the way of imports before affecting the domestic industry. We have what amounts in effect to a holding operation permitting the government to comply with its commitments at the same time that it is setting in motion machinery which could conceivably right the situation. Naturally there is the danger of an ultimate decision confirming Mr. Gray’s findings, in which case the President would be required to impose import restrictions.