86. Editorial Note

On May 9 at its 444th Meeting, the National Security Council took up the request of Attorney General William P. Rogers for advice on the national security implications of a possible settlement of the oil cartel case. The Department of Justice had been approached by lawyers of two of the defendant oil companies (Jersey and Gulf) who expressed a willingness to settle the case on the basis of an injunction against cartel activities abroad substantially affecting U.S. commerce, an injunction against joint markets abroad, and a separation of marketing assets. Before deciding to proceed with the settlement along those lines, the Department of Justice wanted to determine the implications for national security of stronger action against the defendant oil companies; specifically, a possible court order requiring divestiture or substantial alteration of the joint production, refining, transportation, and storage companies. The Department of Justice required an evaluation of how such stronger action would affect U.S. interests both with the countries in which the joint companies had concessions and with countries whose companies were concerned as partners in such joint companies (U.K./British Petroleum or Shell/Netherlands).

The President’s Special Assistant for National Security Affairs, Gordan Gray, briefed the Council on the issue. Gray stated that all the defendant companies would settle along the lines suggested by Jersey and Gulf. The Council took the following action:

  • “a. Noted and discussed the Attorney General’s request for the advice of the National Security Council concerning the national security implications of possible relief directed at joint production, refining, transportation and storage companies participated in by the defendants in the international oil cartel anti-trust case presently being litigated and whether national security considerations suggest that the Department of Justice not secure, either by negotiation or by trial upon failure of negotiation, the divestiture or substantial alteration of defendants’ interest in such joint companies as well as prohibition against defendants entering into similar joint companies in the future.
  • “b. Noted that the Department of State considers that U.S. interests from the standpoint of national security would be adversely affected in the following respects:
    • “(1) There might result a reduction in the U.S. control over the supply of oil for U.S. and Free World needs.
    • “(2) There might be withdrawal of U.S. companies from some particularly important and sensitive country.
    • “(3) Soviet penetration into oil areas not heretofore occupied by them might take place in certain situations.
    • “(4) The movement to nationalization might be encouraged in several ways.
    • “(5) It is very probable that concessions would have to be renegotiated and that certain countries would attempt to secure better terms.
    • “(6) The relative position of oil exporting countries in the total pattern of world trade might be strained or indeed altered.
    • “(7) The proposed relief would provide propaganda ammunition to leftists, nationalists and the Soviet Union for undermining and discrediting the prestige of the United States Government as well as its companies.
  • “c. Noted the views of the Joint Chiefs of Staff that:
    • “(1) Any action which could tend to reduce, and thus weaken, the U.S. position vis-à-vis the USSR or reduce the capability of the United States to continue its progress in developing oil resources, in conjunction with its allies, which will provide an adequate supply of petroleum products to meet their combined requirements in a future war, is contrary to the interests of national security.
    • “(2) The conclusion and implications listed in the Department of State memorandum are valid, and are consistent with the view expressed above.
  • “d. Agreed, with the concurrence of the Attorney General, to recommend to the President that in the interests of national security, the Attorney General be requested to conduct proceedings in the international oil cartel case with due regard to their effect on U.S. national security interests, as noted in b and c above, consulting as appropriate, with the Departments of State and Defense.
  • “e. Further agreed to recommend to the President that the Attorney General be advised that it would not be inconsistent with d above if the Attorney General should, as he deems appropriate in accordance with law, consulting as appropriate with the Departments of State and Defense, proceed with the negotiation of consent judgments with the defendants on the basis of an injunction against cartel activities abroad substantially affecting U.S. commerce, an injunction against joint marketing abroad with any of the other defendants or co-conspirators, and an agreement providing for separation between various defendant partners of the marketing assets which they presently control.
  • “f. Agreed that, after the Attorney General consults with the Departments of State and Defense as provided in d and e above, either of the latter departments may refer back to the National Security Council any questions regarding the conduct of the proceedings or the proposed consent judgments which appear to involve possible adverse effects on U.S. national security interests.

Note: The above actions, as approved by the President, specifically including the approval of the recommendations in d and e above, subsequently transmitted to the Attorney General and the Secretaries of State and Defense.” (Memorandum of discussion by Boggs, May 13; Eisenhower Library, Whitman File, NSC Records)

The extract from the National Security Council discussion printed here became NSC Action No. 2233, approved by the President on May 13. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)