239 Department of External Affairs to Legation in Washington

Cablegram 1110 CANBERRA, 28 July 1944

SECRET

Your 374. [1]

Dominions Office advises that Anglo-American discussions on oil are about to be resumed in Washington at the Ministerial level.

Beaverbrook as leader of the United Kingdom Delegation has been asked to make arrangements to keep Dominion representatives in Washington in touch with discussions.

The intention now appears to be to seek an immediate Anglo- American understanding with a view to publishing a joint memorandum but to defer multilateral discussions until after the war.

Our communications with Dominions Office have stressed the relationship between petroleum supplies and world security [2] and we succeeded in having the United Kingdom draft strengthened in this respect. The United Kingdom did not think it possible to obtain acceptance for our suggestion that there should be definite commitments in the memorandum of understanding that supplies of oil would be withheld from aggressors. [3] Presumably there will be opportunity for again raising this point during separate discussions regarding arrangements for collective security.

We also emphasized to United Kingdom our interest in the eventual conclusion of an International Petroleum Agreement and suggested certain modifications of United Kingdom draft with a view to removing the danger that the purpose of the proposed memorandum of understanding might appear to be that Britain and America should support each other in holding on to what they have.

Please keep closely in touch with talks and advise us. [4]

1 Dispatched 3 May. On file AA:A989, 44/735/850. It reported the outcome of exploratory discussions between U.K. and U.S. officials at Washington in April-May.

2 See Document 174.

3 See Document 208.

4 The Agreement on Petroleum was signed on behalf of their respective governments by Beaverbrook and Stettinius on 8 August.

A copy is on the file cited in note 1. While in many respects identical to the memorandum of understanding drawn up at the talks in May (note 1), it did reflect the concerns raised in Document 174 by including the words 'and in order to serve the needs of collective security' in Clause 4 of the preamble (see Document 174 and note 7 thereto), and by adding to Article I(1) the words 'subject always to considerations of military security and to the provisions of such arrangements for the reservation of peace and prevention of aggression as may be in force...'Article I(3), however, remained substantially unaltered.

[AA:A989, 44/735/850]