Foreign Relations of the United States, 1955–1957, Foreign Aid and Economic Defense Policy, Volume X

265. Memorandum of a Conversation Between Secretary of State Dulles and the Venezuelan Ambassador (Gonzalez), Department of State, Washington, July 23, 1957¹

Washington, July 23, 1957

SUBJECT

• Action by U.S. Government Regarding Oil Imports

The Secretary told Ambassador Gonzalez that he sought this opportunity to discuss the action pending by the United States Government with respect to restricting oil imports.² Since the Suez Canal crisis they had increased sharply, to the point of constituting a menace to oil development in the United States and hence our own national security. The Secretary referred to the action of President Eisenhower in establishing a Cabinet Committee chaired by Secretary of Commerce Weeks and on which he sat along with the Secretaries of Interior, Treasury and Labor and the Attorney General. He said that he had participated actively in the Committee meetings and that, while the Committee’s work had not yet been completed, he thought it was now timely to consult with the Ambassador in order that he might report directly to his country. We recognize the importance of petroleum in our relations with Venezuela.

The Secretary said that it appeared that the Cabinet Committee’s recommendations to the President would be along lines so as to permit the following conclusions to be drawn:

(1) Restrictions to be applied would be on a voluntary basis, at least in the beginning, and would be applied to companies rather than to countries.

(2) Companies would be expected to fall back approximately to the level of their 1956 imports into the United States and would have to restrict their imports for the second half of 1957 which were “extravagant”.

(3) The formula to be applied for the percentage of imports would be somewhat in excess of that which had been applied by the Cabinet Committee in February, 1955 (i.e., the 1954 ratio).

(4) There would be no discrimination with respect to countries or geographical areas of the world, although the fact that no restrictions were contemplated for District 5 would tend to give somewhat more favorable treatment to the countries shipping oil to that area.

(5) U.S. import restrictions now would be advantageous to exporting countries in helping to maintain a satisfactory price for their oil since the prices paid them are based on U.S. Gulfport prices.

(6) The plan contemplated would permit foreign oil-producing countries to share in the growth of the U.S. market.

Ambassador González expressed his appreciation and that of his government for the opportunity to discuss this subject with the Secretary. He acknowledged that oil was absolutely vital to his country. He was certain that Venezuela’s interests were not being overlooked by the Secretary and the Department of State. They recognized the heavy pressure against imports led by the independent oil producers of the United States. The Secretary interjected to remind the Ambassador of what he had pointed out to the Venezuelan Government at the time of his visit to Caracas in 1954, namely that U.S. exporters to Venezuela, who have at least as much at stake in maintaining a market here for Venezuelan oil as does Venezuela herself, are politically unorganized, thus making it all the more difficult for the Department to portray the importance of our two-way trade with Venezuela.

The Ambassador said that he would communicate immediately with his Government. The Secretary cautioned the Ambassador to make clear that the program is wholly tentative and subject to final approval by the Cabinet Committee and then the President. The Secretary, in answer to the Ambassador’s query, estimated that it would be at least three or four more days before any announcement would be made, perhaps more.

1. Source: Department of State, Central Files, 411.006/7–2357. Confidential. Drafted by Rubottom on July 26.
2. In a memorandum of July 23 to Dulles, Rubottom stated that González was calling at the Secretary’s request and noted: “This is in accordance with our practice of consulting informally with the countries most concerned with our oil import policy. These exchanges of views not only serve to keep those countries informed of current developments but also provide them with a sense of participation in the formulation and implementation of the policies we adopt.” (Ibid.)