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PRESIDENT'S SECRETARY'S FILE Subject File Oil Conference Box 156 PSF REMINDER FOR THE PRESIDENT: You said you wished to talk with Ed Stettinius about this today. the PSF.Oill Conference former 4-44 THE UNDER SECRETARY OF STATE WASHINGTON file friend February 12, 1944 Dear Miss Tully, I am terribly sorry to have to go back at the President with the attached, but I have no other choice under the circumstances. I am sure you will understand. The press will be reising the matter at the White House and the State Department the first of the week, and I think that B quick decision is necessary. Many thanks, Sincerely yours, THE UNDER SECRETARY OF STATE WASHINGTON February 2, 1944 FOR THE PRESIDENT You will recall your instructions to serventerday on the forth- conding writish petroleun conversations. You suggested the American regotiating proof be mnde un no follows: - Secretary Ickee, Chairman, the Under Secretarios of State, The and Invy and Tr. Charles Y. Vilson, Vice Chodrann of the For Production Board. Order to Use keen personal interest Secretary Hull has taken in there conversations and the Importance he attached to then in view of the Department's responsibility in the conduct of our foreign relations, it was felt that the Secretary should be Informed of the changes contraplated. I called his the coming cad he naired ne to paper along to "ON the following observations in his behalf. 1. He foold it trueld be to great ulintrice to degrive the Department of the lendership In these discussions. 2. lie to strongly assosed to conducting the discussions on other the in writing level -15% tochnical and solitions experts who can Invote full time to the may Intriente whilder involved. "Ith your nurovel, he has almody family advised the British the to convernations will be conducted at the working level with the American proup knowled hy . Carler Promon, Petroleum Adviser of the Department, -111 the other members - 1100. Poul Alline, Denity Director - 2 - of our Office of Enstern and African Affairs, and n. reprecentative of Secretary Ickes' Petroleum Administration for Tar. He has also informed the American petroleum industry to the name effect. Hence, in his opinion, to change notr would be dangerous from the viewpoint of the successful conduct of these important and difficult conversa- tions, and it would indicate to the British as well as to our industry n. state of confueion within the Covernment. Furthersore it would danage the prestige of the Department of State in the discharge of its responsi- bilities. I mn sorry to have to raise this matter with you again but in view of the Secretary's strong feeling on the netter, I felt certain you would wish ne to do so. Le you know a proupt and final decision is needed. After considering the Secretary's consents, do you rish to change your instructions to no of yesterday? PSF Oil conference folder wave THE UNDER SECRETARY OF STATE WASHINGTON fide February 15, 1944 HEMORANDUM FOR THE PRESIDENT Immedintely after our telephone conversa- tion this morning, I discussed the natter of the oil negotiation committee thoroughly with Mr. lckes end he 18 perfectly satisfied with this final solution. PSF Osl Conference file folder 4.44 THE UNDER SECRETARY OF STATE bazy WASHINGTON 22 February 22, 1944 MEMORANDUM FOR THE PRESIDENT Subject: British Petroleum Discus- sions. In accordance with your instructions in our conversation this morning, I en- close herewith a proposed message from you to the Prime Minister. Enclosure. THE UNDER SECRETARY OF STATE WASHINGTON February 22, 1944 Dear Miss Tully: The President urgently re- quested that this be sent today and I should greatly appreciate it therefore if you would put it be- fore him. With best wishes, Sincerely yours, Enclosure. Education Miss Grace G. Tully, The White House. PSF ail conference folder 4-44 ADDRESS OFFICIAL COMMUNICATIONS TO THE SECRETARY OF STATE WASHINGTON, D.C. file DEPARTMENT OF STATE WASHINGTON March 29, 1944 MEMORANDUM FOR THE PRESIDENT SUBJECT: FORTHCOMING CONVERSATIONS WITH THE BRITISH ON OIL In accordance with the desire expressed in your memorandum of March 24, 1944, I have advised Mr. Leo Crowley that you wish him to be a member of the group which will conduct for this Government the forthcom- ing conversations with the British on oil. CH FORVICTORY BUY UNITED STATES RAVINGS BONDS AND STAMPS March 24, 1944 MEMORANDUM FOR THE SECRETARY OF STATE: Through en oversight no representative of the Foreign Economic Administration was included in the group named to negotiate with the British on the Middle East papeline. Would you be good enough to tell Leo Crowley that I would like him to be one of the group? (FDR) LC:fm (100%) hmo ADDRESS PICIAL COMMUNICATIONS TO CA THE SECRETARY OF STATE <<<<<<<<<<<<<<<<<<<<<<<<< PSF Ore Conference folder 4.44 WASHINGTON, D.C. DEPARTMENT OF STATE Bx174 WASHINGTON MEMORANDUM FOR THE PRESIDENT SUBJECT: FORTHCOMING CONVERSATIONS' April 1944 WITH THE BRITISH ON OIL I refer to your memorandum of April 5, 1944, express- 1ng concern that the British have not appointed a committee for the forthcoming oil conversations corresponding to the Cabinet Committee appointed by you of which I am Chairman. Ambassador Winant reports that it is contrary to all British custom and procedure to publish the names of Minis- terial Committees. He also reports that the British, in order to have their Committee rank equally with the Commit- tee appointed by you, are faced with the difficulty of having to send here members of the War Cabinet, including Foreign Minister Eden and Lord Leathers, at a time when these men are seriously involved in operational preparation for the invasion. Ambassador Winant reports that he has pressed this matter as hard as possible in several conversations with the Prime Minister and Foreign Minister Eden. He is con- vinced that they are not attempting to evade the issue but desire to work with us. It is his opinion that the British will take definite action after expert groups representing the two Governments have conducted exploratory discussions. Accordingly, I strongly believe, and hope you will con- cur, that we should not approach the British again at this time concerning the Ministerial Committee but should proceed rapidly with such exploratory discussions, and the Department is completing the necessary plans to that end. The British have named their group of experts who will arrive here about April 15. This group, which is headed by Sir William Brown, is composed of experts in foreign political and economic policy, representatives of the Service branches and the Brit- ish oil industry. I have named the Department's Petroleum Adviser to head the American group of experts and I have in- formed Secretary Ickes that it is my view that the American group should also include two additional experts (foreign economic and political) of the State Department, three ex- perts from the Petroleum Administration for War, and a repre- sentative each of the Army and Navy. FORVICTORY BUY UNITED STATES RATINOS CH BONDS AND STAMPS State Dept. focaer THE WHITE HOUSE WASHINGTON April 5, 1944 MEMORANDUM FOR SECRETARY HULL I am concerned that the British have not appointed a committee to discuss oil with the committee which I appointed some weeks ago, of which you are Chairmen. I know that they have appointed a "technical" group which will be here shortly; but I think that it is extremely important that conversations begin immediately on a policy level. Will you please communicate with the British immedi- ately and urge them to appoint their representatives and to have them over here for policy conversations with your committee? I think they should start not later than May 1, and earlier would be better. "7DR", F.D.R. "10 namers accorranied the ortainel of this gemorandun to the Secreture of State. 4/5/44 I told Ketty Gilligan that the was sent him THE WHITE HOUSE WASHINGTON April 5, 1944 MEMORANDUM FOR THE PRESIDENT. This is that proposed memorandum to Secretary Hull about the British delegation on oil. If you send it, will you please let me know so I can tell Secretary Ickes about it? fn S.I.R. Oil conference folder 4-44 ADDRESS OFFICIAL COMMUNICATIONS TO SECRET THE SECRETARY OF STATE WASHINGTON, o. c. Give PSF DEPARTMENT OF STATE Bx WASHINGTON May 4, 1944 174 MEMORANDUM FOR THE PRESIDENT FROM SECRETARY HULL The enclosed draft Memorandum of Understanding on petroleum was agreed to, on an ad referendum basis, by the United States and United Kingdom expert groups as a result of the exploratory discussions on oil, and was considered on May 2 by the Committee you appointed and of which I am Chairman. This Committee unanimously approved the Memorandum. In the exploratory discussions, the United Kingdom Delegation urged that the Memorandum of Understanding be re-enforced on two counts: 1. The British group felt that there should be explicit recognition of the United Kingdom's dependence upon imported petroleum supplies and that therefore there should be special assurances of ample supplies to the United Kingdom for its national security and in- dustrial and commercial well-being. The American expert group felt that the prime purpose of the Memorandum is to assure ample oil supplies to all countries and that would policy. be in conflict with our established commercial By RHP Data 5-30-72 State Dept. DECLASSIN any specific further assurance for the United Kingdom 2. The United Kingdom group urged that the two Governments should agree not merely to respect but also to support all valid concession contracts. This further commitment would have obligated the United States Govern- ment to take joint action with the British vis-a-vis third governments regarding the validity of contracts, 11-72 and the American group was not authorized to consider so broad a commitment. We understand that when the British Delegation pre- sents the draft Memorandum to the Cabinet Committee, they will urge that the second of these points be pressed again at a higher level. It is thought unlikely that there will be further pressure for special assurances of supplies for the United Kingdom. FORVICTORY Enclosure: BUY UNITED STATES Draft Memorandum C BONDS AND of Understanding. STAMPS STORET SECRET April 29, 1944 MEMORANDUM OF UNDERSTANDING "ITH THE UNITED KINGDOM ON PETROLEUM Preamble The Governments of the United States and the United Kingdom, whose nationals hold, to a substantial extent jointly, rights to explore and develop petroleum resources in other countries, recognize: 1. That ample supplies of petroleum*, available in international trade to meet increasing market demands, are essential for both the security and economic well-being of nations; 2. That for the foreseeable future the petroleum resources of the world are adequate to assure the availability of such supplies; By FAP Data 5-30-72 State Dept. 1-11-72 DECLASSIFING 3. That such supplies should be derived from the various producing areas of the world with due consideration of such factors as available re- serves, sound engineering practices, relevant economic factors, and the interests of producing and consuming countries, and with a view to the full satisfaction of expanding demand; 4. That such supplies should be available in accord- ance with the principles of the Atlantic Charter. I The two Governments agree that the development of petroleum resources should be expanded in an orderly manner on a world-wide basis with due consideration of the factors set forth in paragraph 3 of the Preamble and within the frame- work of applicable laws or concession contracts. To this end they will concert their efforts to ensure, with respect to petroleum resources in which rights are held or may be ac- quired by the nationals of either country, 1. That petroleum shall be available in international trade to the nationals of all peace-loving countries in adequate volume, at fair prices and on an equit- able and nondiscriminatory basis; 2. That * "Fetroleum" throughout this document is used to signify crude petroleum and its derivatives. -2- 2. That the development of petroleum resources and the benefits received therefrom by the producing countries shall be such as to encourage the sound economic advancement of those countries; 3. That the development of these resources shall be conducted with a view to the availability of ade- quate supplies of petroleum to both countries as well as to all other peace-loving countries, sub- ject to the provisions of such collective security arrangements às may be established; 4. That, with respect to the acquisition of explora- tion and development rights in areas not now under concession, the principle of equal opportunity shall be respected by both Governments; 5. That the Government of each country and the nation- als thereof shall respect all valid concession con- tracts and lawfully acquired rights, and shall make no effort unilaterally to interfere directly or in- directly with such contracts or rights; 6. That the exploration for and development of petro- leum resources, the construction and operation of refineries and other facilities, and the distribu- tion of petroleum shall not be hampered by restric- tions imposed by either Government or its nation- als, inconsistent with the purposes of this Memo- randum of Understanding. II The two Governments recognize that the principles de- clared in Article I hereof are of general applicability and merit adherence on the part of all nations interested in the international petroleum trade of the world. Therefore, with a view to the wider adoption and effec- tuation of the principles embodied in this Memorandum of Understanding they agree that as soon as practicable they will propose to the governments of other interested producing and consuming countries an International Petroleum Agreement which, inter alia, would establish a permanent International Petroleum countries. Council composed of representatives of all signatory To this -3- To this end the two Governments hereby pledge themselves to formulate plans for an international conference to consider the negotiation of such a multilateral Petroleum Agreement. They also pledge themselves to consult with other interested governments with a view to taking whatever action is neces- sary to prepare for the proposed conference. III There are, however, numerous problems of joint immedi- ate interest to the two Governments, with respect to petro- leum resources in which rights are held or may be acquired by their nationals, which must be discussed and resolved on a cooperative interim basis if the general petroleum supply situation is not to deteriorate. With this end in view the two Governments hereby agree to establish a Joint Petroleum Commission to be composed of ten members, five members to be appointed immediately by each Government. This Commission, in furtherance of and in accord- ance with the principles stated in Article I hereof, shall consider problems of mutual interest to both Governments and their nationals, and, with a view to the equitable disposi- tion of such problems, shall be charged with the following duties and responsibilities: 1. To prepare long-term estimates of world demand for petroleum, having due regard for the interests of consuming countries and expanding consumption re- quirements, 2. To suggest the manner in which, over the long term, this estimated demand may best be satisfied by pro- duction equitably distributed among the various producing countries in accordance with the criteria enumerated in paragraph 3 of the Preamble, 3. To recommend to both Governments broad policies for adoption by operating companies with a view to effectuating programs suggested under the pro- visions of paragraph 2 above, 4. To analyze such short-term problems of joint interest as may arise in connection with production, process- ing, transportation and distribution of petroleum on a world-wide basis, wherever the nationals of either -4- either country have a significant interest, and to recommend to both Governments such action as may appear appropriate; 5. To make regular reports to the two Governments concerning its activities; 6. To make, from time to time, such additional reports and recommendations to the respective Governments as may be appropriate to carry out the purposes of this Memoran dum of Understanding. The Commission shall establish such organization as is necessary to carry out its functions under this Memoran- dum of Understanding. The expenses of the Commissi on shall be shared equally by the two Governments. IV To effectuate this Memorandum of Understanding the two Governments hereby grant reciprocal assurances: 1. That they will adhere to the principles set forth in Article I, paragraphs 1 to 6 inclusive, 2. That they will endeavor to obtain the collabora- tion of the governments of other producing and consuming countries in the implementation of the principles set forth in Article I, and will consult, as appropriate, with such governments in connec- tion with activities undertaken under Article III, 3. That upon approval of the recommendations of the Commission they will endeavor, in accordance with their respective constitutional procedures, to give effect to such approved recommendations and, wherever necessary and advisable, to ensure that the activities of their nationals will con- form thereto, 4. That each Government vill undertake to keep itself adequately informed of the current and prospective activities of its nationals with respect to the development, processing, transportation and distri- bution of petroleum, 5. That each Government will make available to the Commission such information regarding the activities of its -5- of its nationals as is necessary to the realiza- tion of the purposes of this Memorandum of Under- standing. V This Memorandum of Understanding shall continue in force until six months after notice of termination by either Govern- ment or until superseded by the International Petroleum Agree- ment contemplated in Article II.