526. Letter From the Ambassador in Cuba (Bonsal) to the Assistant Secretary of State for Inter-American Affairs (Rubottom)1

Dear Dick: It was indeed thoughtful of you to ask Tex Brewer, the Standard Oil of New Jersey representative here, to fill me in on certain developments of interest to me with regard to the Cuban policy of our Government. For the record and for your confirmation or correction, I am summarizing what Brewer told me—and I am adding some comments of my own which, of course, were not discussed with Brewer.

Brewer called on me at the residence at 3:00 p.m. Saturday, June 4. When I offered to show him the aide-mémoire delivered to the Cuban Government that morning2 he told me that he had already seen it the previous afternoon in Washington. He read over my copy of the text and indicated that it seemed to him about the same as that he had read in your office.

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From this I gather that the Department was already committed a good many hours before the Embassy received the text of the aide-mémoire to the publication of the document in the general form and on the date in question and that this fact was known to people outside our Government. In all modesty, I believe that we in the Embassy could have made useful suggestions as to the timing, content and drafting of this paper. But that is water over the dam.

Brewer told me that the aide-mémoire was part of a series of positive steps to be taken in our Cuban policy. (You had intimated as much to me in our telephone conversation that same morning—June 4.)3 He then discussed the policy that was worked out in Washington in the matter of the attitude to be assumed by the three foreign oil companies owning refineries here with respect to the refining of Russian crude acquired by Cuba in accordance with the trade agreement with the Soviets. The American companies are Esso and Texaco; Shell is British-Dutch.

Brewer stated that the policy of his company had been, on the assumption that the U.S. Government would take no stand in the matter, that it would be inevitable to refine the Russian crude as desired by the Cuban Government. The assumption, however, turned out to be contrary to fact. At a meeting held perhaps on June 3 in Secretary Anderson’s office with Tom Mann representing the Department and Mr. Barnes CIA,4 Texaco and Standard (Esso) were told by Secretary Anderson the following:

1.
That a refusal on their part to refine Russian crude in Cuba would be consistent with over-all U.S. policy toward the Cuban Government.
2.
That an agreement to make such a refusal by the American companies concerned would not be considered in violation of the U.S. anti-trust laws.
3.
That if the Cuban Government were to intervene one of the American refineries to handle Russian crude, leaving the other to refine its own crude from its own sources, our Government would agree that the latter, without incurring any consequences from our anti-trust laws, could refuse to furnish any more crude from its own sources.

On the basis of this statement of U.S. Government policy, Standard (Esso) and Texaco have decided to refuse to refine Soviet crude.

The effect of the policy which the companies now plan to adopt of refusing to refine the Russian crude will be to present the Cuban Government with the alternative of either accepting the decision or of [Page 937]assuming full responsibility for the operation of the refineries and for the procuring of the necessary crude from Russian or other available sources.

Brewer added, however, that the Shell position is still being discussed at high levels in London with the British Government presumably involved. It is hoped that a reply from London will be received on Monday, June 6. In the event that Shell goes along with the refusal to refine Russian crude, the three companies will communicate their decision to the Cuban Government on that same day. If Shell does not go along with the refusal, it will then be necessary to reconsider the whole matter and Brewer will probably go to New York for the purpose.

Brewer showed me a draft of the letter which his company plans to send to Ché Guevara in the event refusal to refine Russian crude is agreed upon by all three companies. It is a well drafted, courteous document stressing that Esso has been in Cuba 78 years, that it has its traditional sources of petroleum in Venezuela, that it has been most cooperative in extending dollar credits for crude imports in the current exchange crisis and that it respectfully refuses to refine the Soviet crude offered by the Cuban Government.

Brewer, Morrison and I discussed briefly the situation as it may develop if the refusal is made. The Government will no doubt treat it as a serious challenge and a test of its strength as indeed it will be. Drastic measures can be anticipated since in the present temper of the Government there will be no moderating voices heard. I think the companies will be intervened and that the Government will make every effort to increase shipments of Russian crude. These are currently estimated at some 900,000 tons from June 1 to December 31 of this year, or about 45 per cent of the estimated refinery runs for the period. The Government will have to find 1,100,000 tons of crude from Russian and independent sources to make up for the lack of crude which the companies are supposed to furnish. The evidence on whether this can be done is conflicting. Normal stocks of crude in the country are the equivalent of 14 to 16 days supply. So the margin is not great.

It is my belief that the Government will try to meet the challenge to its authority “by imperialist oil companies backed by imperialist Governments” in drastic fashion. In addition to possible help from the U.S.S.R. or from the U.A.R. and perhaps others, the Government will, in my judgment, try to make of this a big popular, political issue under the “Patria o Muerte” slogan with rationing of gasoline and other petroleum products, intervention of service stations in addition to refineries, etc. We will hear a lot from the students, campesinos, workers and their militia.

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On the other hand, this test of strength will not take place under wholly unfavorable circumstances from our point of view. I am sure that many people here will understand why, under present world circumstances, American refineries should refuse to accept crude from what are in effect enemy sources. The issue of Cuban involvement with the Communist world will be brought out with the greatest clarity. I am sure an overwhelming majority of Cubans oppose this. If any real hardships develop and persist, the Government will lose a good deal. On the other hand, if the Government manages to operate the refineries and to maintain an adequate flow of products, it will have gained a significant victory, comparable to that of Egypt when it demonstrated its ability to operate the Suez Canal. I doubt if the Government’s decision in the matter will be made on the basis of a cold appraisal of possibilities. Nationalistic emotions will predominate.

Brewer tells me that his company is encouraged by the Venezuelan Government’s attitude toward this matter. While Foreign Minister Arcaya favors the Cuban Government’s position on this and many other matters and pretends to regard the replacement of Venezuelan by Soviet crude as a matter of little importance, President Betancourt and Petroleum Minister Perez Alfonso are very displeased at the prospective loss of the Cuban market because of the Cuban-Soviet pact.

The outcome of this situation, if the refineries refuse to handle Russian crude, is hard to forecast. A number of highly complex political and technical factors are involved which have, I am sure, been carefully considered by our Government. I certainly hope for the best. A showdown is unavoidable if not on this issue, then on some other. Perhaps this is as good as any.

I hope that you will keep us as closely as possibly informed on our Government’s development of its Cuban policy. You, of course, will have to be the judge as to how far it is possible or desirable to get us into the decision-making stage of the various steps in what can be called the show-down phase. We may and perhaps do tend to exaggerate the degree to which we in the field can be useful in this respect.

There is, however, one point on which I am sure we are fully agreed. That is the importance of bearing constantly in mind the security of the lives of Americans in Cuba in connection with any drastic steps or statements we may be contemplating. You know as well as I do that our enemies are anxious to provoke an intervention on our part. As the Cuban Government’s position becomes more desperate, the temptation to cause a serious incident which could cause an act of force by us and thus identify the increasing difficulties of the regime or even its eventual fall with Yankee intervention will become greater all the time. Give us as much advance warning as you can of proposed steps and let us join with you in appraising their possible impact on the security of Americans in Cuba.

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Sincerely yours,

Phil
  1. Source: Department of State, Central Files, 611.37/6–660. Secret; Eyes Only.
  2. For text of the aide-mémoire, June 4, delivered to the Cuban Foreign Ministry protesting the Cuban Government’s “campaign of slander” against the United States, see Department of State Bulletin, June 20, 1960, pp. 994–995.
  3. Not further identified.
  4. Presumably the May 31 meeting; see supra.