Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

297. Memorandum From the President’s Special Assistant (Paarlberg) to the President’s Personal Secretary (Whitman)⁰

April 27, 1959.

Oil Imports. On Monday, April twenty-seventh at 9:30 a.m., the following group held a half-hour conference with the President regarding modification of existing oil import restrictions:

• Secretary of the Treasury Robert B. Anderson
• Secretary of the Interior Fred A. Seaton
• Under Secretary of State Douglas Dillon
• Director, OCDM, Leo Hoegh
• Gerald D. Morgan
• Don Paarlberg

Mr. Dillon presented a proposal,¹ agreed on by the agencies involved (with some reservations from Treasury) for the liberalization of oil import restrictions presently in effect with respect to Canada. We have been pressed by the Canadians for this liberalization; failure to liberalize might be an added inducement for the Canadians to build an uneconomic pipeline from their western oil fields to the Montreal market. This would cut into Venezuelan oil shipments to Montreal and upset the market generally.

The proposed liberalization, it is judged, would increase the flow of Canadian oil into the United States market, chiefly into the Northwest, by about 30,000 barrels a day, a modest amount.

Secretary Anderson agreed with the proposed action but pointed out that there might be objection from Alaska, from our own Colorado-New Mexico suppliers and from Far Eastern suppliers.

The President agreed with the proposed liberalization. He indicated the desirability of an understanding with Canada to the effect that if imports should loom excessively large, or if the Venezuelans should be blocked out of Montreal, this would be dealt with as a new situation.

Mr. Dillon discussed the proposed proclamation and read a proposed press release,² tentatively scheduled for release on Thursday, April thirtieth.

The relationship of the proposed action to the situation in Venezuela was discussed. Modification of the regulations with respect to Venezuela are in prospect and are being discussed with the Venezuelans. But it will be a matter of months before action can be taken.

A draft of a letter from the President to President Betancourt of Venezuela was discussed. This draft was intended to allay Venezuelan disappointment arising from the desire of the Venezuelans for modification of restrictions against them at the time we announce modification of the Canadian curbs. The President felt the draft seemed to promise more to the Venezuelans than might be forthcoming. It was agreed that the letter would be redrafted. Dillon, Morgan and Paarlberg will work on the redraft.³

Don Paarlberg

0. Source: Eisenhower Library, Whitman File, Eisenhower Diaries. No classification marking. Drafted by Paarlberg.
1. The proposal became Proclamation No. 3290, April 30. For text, see American Foreign Policy: Current Documents, 1959, pp. 1465–1467.
2. The press release has not been found.
3. The draft letter, April 25, is in Department of State, ARA Files: Lot 61 D 319, Petroleum Policy. The letter as sent, April 28, was transmitted in telegram 724 to Caracas, April 29, and stated that the forthcoming amendment to the mandatory program would improve the operation of the program and serve the interests of the Western Hemisphere. The Presidential letter reminded Betancourt that while the relatively small amount of Canadian oil sold in the north central and northeastern United States did not compete with Venezuelan oil, the amendment would reduce, the United States hoped, the serious risk of a permanent loss to Venezuela of its Montreal market. (Ibid., Central Files, 831.2553/4–2959)