Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

565. Telegram From the Ambassador in Venezuela (Warren) to the Department of State¹

Caracas, March 30, 1955—6 p.m.

311. Because overriding importance relations Venezuela, US impending action USA Senate respect restrictions USA importation oil² it seems advisable Embassy summarize its understanding Venezuelan situation and its implications.

1. [Garble] to this government’s foreign policy is its realization interdependence USA–Venezuela because her oil, iron ore, industrial diamonds, strategic location and her need USA supplies and sea protection in case of war.

2. She also realizes her 5 million population one of five best USA customers buying more from US than selling US.

3. Her capacity buy USA depends directly her ability sell US.

4. She best example world today USA method doing business and is showroom for success our system.

5. Other Latin American nations criticize her for following our, system.

6. Position Venezuela this respect due declared intention Venezuelan Government follow our system through foreign policy based on USA friendship.

7. Stability this government depends upon its oil revenues.

8. Oil revenues depend continued good USA market.

9. Venezuela has indicated readiness cooperate give reasonable protection that market by voluntary restrictions.

10. Neither public nor governmental opinion will accept supinely USA imposition legislative restrictions and consequent curtailments to market for oil.

(A) Such contingency would force Venezuela take retaliatory action including denunciation USA Trade Agreement and declaration tariff increases.

11. Despite such retaliation public opinion may well bring about overthrow this government.

12. Any ensuing government would be more leftist, less friendly USA.

13. Such government might well nationalize oil and iron ore industry.

14. At any rate USA would (a) force a friendly government into camp those opposed private initiative capital, (b) lose outstanding example good oil company-government relationships, forfeit its showroom for USA system and its superiority in best Latin American market, and (c) retard or prejudice progress made in persuading other Latin countries such as Argentina, Peru and Brazil of advantages of participation private US interests in petroleum industry.

15. Venezuelan Government reluctant believe USA would upset this mutually advantageous relation even though coal and independent oil industry may need attention.

16. This government and people subconsciously unwilling believe their national prosperity and basis of this regime can be swept away by action of foreign leg of a legislative body.

17. If legislative restrictions³ are imposed Embassy has no doubt Venezuela will immediately react with violent censure and retaliation.

Warren

1. Source: Department of State, Central Files, 831.2553/3–3055. Confidential. Forwarded to the Special Assistant to the President for Economic Affairs, Gabriel Hauge, for information and distribution, as appropriate, within the White House.
2. Telegram 290 to Caracas, March 28, reported strong support in the Senate for an oil import quota. (Ibid.)
3. Further documentation concerning possible legislative restrictions is Ibid., 431.006 and 411.316.