Foreign Relations of the United States: Diplomatic Papers, 1944, The American Republics, Volume VII

831.24/1200

The Secretary of State to the Chargé in Venezuela (Flack)

No. 2415

Washington, February 29, 1944.

The Secretary of State informs the Embassy that meetings were held between members of President Medina’s party, among them Señor Rodolfo Rojas, Señor Manuel Silveira,²⁹ Señor Eugenio Mendoza³⁰ and Commander Antonio Picardi,³¹ and representatives of the Department, the War Production Board and the Foreign Economic Administration on January 22, 1944, in reference to Venezuelan projects and general requirements.³² At that time the representatives of the war agencies were unable to make any definite commitments as to the action which would be taken on the suggested projects but indicated their willingness to study the lists of materials furnished by the Venezuelan delegation in an attempt to determine the supply situation and thus the possibility of issuing export licenses and furnishing priority assistance when projects were formally submitted. It was hoped that some indication as to the possibilities of procurement of the listed items could be given prior to the departure of the delegation from the United States, but the task apparently could not be accomplished in such a short time. The delegation was informed verbally, however, that the La Guaira Port project would be approved and that certain materials for other projects could, in all probability, be furnished. However, there was insufficient time fully to examine the lists and to arrive at definitive conclusions.

In the intervening weeks, the lists furnished by the delegation have been carefully scrutinized and the reactions of the representatives of the war agencies may now be communicated to the Embassy. On certain items listed there is yet insufficient information available as to the nature of the items for the war agencies to determine whether procurement is now possible. Certain decisions must await the placement of formal applications accompanied by complete lists. However, it was considered that a review of the situation as it now apparently stands should be forwarded to the Embassy for informal discussion with Venezuelan officials. Certain of the specific requirements in each of the projects will be considered in turn:

Allocation of Hops

Señor Rojas presented a letter from Cervecería de Caracas which stated that the allocation of hops was insufficient to meet Venezuela’s minimum needs. Since that time, through the efforts of the Foreign Economic Administration and the Department, this allocation has been increased to 148,000 pounds which is approximately the amount which was indicated to be the minimum requirements of Venezuela.

Liquid Rubber Compound

Señor Rojas presented a letter from Cía. Anonima Industrial de Pesca which stated that certain orders for this product had been placed with Max Ams Machinery Company but that difficulty had been encountered in securing export licenses. Señor Rojas was informed by a letter prior to his departure that, according to information secured from the Max Ams Machinery Company, export licenses had been granted to cover all of the materials included in these orders and that two orders had already been shipped.

Hospital Civil de Valencia and Hospital Anti-tuberculosis “Venezuela”

It was stated by members of the Venezuelan delegation that the buildings for these two hospitals are entirely completed but that various items of equipment for water heating and distribution, laundries, intercommunications, air conditioning, et cetera with a value of $211,328 are urgently needed, for these hospitals cannot be used until at least some of this equipment is secured. While technical hospital equipment, in view of the war effort, would be most difficult to procure, it is contemplated that some of the building equipment items listed in the brochure of the Ministry of Public Works for these hospitals may be furnished in the reasonably near future. Therefore, it is suggested that applications in project form be placed with the Foreign Economic Administration covering the equipment needed for each of these hospitals. Two projects should be submitted, one for each hospital. It is likely that certain of the items listed cannot be furnished at the present time but others can be, and in any event, the projects will be considered with sympathetic interest by the Foreign Economic Administration.

Sewer and Aqueduct Projects for the Federal District

According to the brochure furnished by the Ministry of Public Works, this project will require a substantial quantity of iron and steel and, in addition, equipment valued at $740,300. Information has not been furnished as to the nature of the equipment needed for this project. The Venezuelan delegation stated that equipment lists would soon be furnished but these lists have not as yet been received. In the meantime, until precise information is made available, no conclusions can be reached as to the likelihood that export licenses will be granted.

In order to conserve time, it is suggested that this project be submitted to the Foreign Economic Administration and that both materials and equipment be covered in the application. It is particularly important that an indication be given as to the time at which various quantities of materials or items of equipment will be needed in as much as the project will probably be under construction for two or three years. According to information now in the hands of the Department, it appears probable that the iron and steel will be needed at this time but that the equipment will not be needed until 1945 or 1946. In that event, the project may be started with reasonable assurance that efforts will be made to furnish materials as they are needed for construction purposes. No assurance can be given that the project will be approved in full by the war agencies but it should, nevertheless, be submitted and it will receive sympathetic consideration.

Sewer and Aqueduct Projects for La Guaira and Maiquetia, Valencia, Barcelona, Puerto La Cruz, and Guanta

These projects will require substantial quantities of steel, lead, copper and bronze, foundry iron, galvanized sheets and other materials. They will likewise require equipment with a value of $94,029, according to the lists furnished by the delegation. Each of these projects should be formally presented to the Foreign Economic Administration. It is not anticipated that difficulty will be encountered in obtaining the necessary materials other than the equipment. If new equipment is not available, perhaps used equipment may be substituted.

Guanta Cement Mill Project

This project which covers all equipment needed for a cement mill with a capacity of approximately 100,000 tons annually was the subject of a discussion at a meeting between Mr. Mendoza and representatives of the Department and the Foreign Economic Administration. Mr. Mendoza had with him all the documentation necessary to submit the project to the Foreign Economic Administration. After a thorough discussion of the project, it was stated to Mr. Mendoza that most of the equipment listed was in exceedingly short supply and only available for projects directly connected with the war effort. Mr. Mendoza was given no encouragement that the project could be immediately implemented through assistance in production scheduling and the issuance of export licenses. Nevertheless, the project has been formally submitted to the Foreign Economic Administration where it is now pending. It is highly probable that it will be rejected as have other such projects for other Latin American republics in the immediate past.

It was suggested to Mr. Mendoza that an attempt be made to find a suitable second-hand plant which could be moved to Venezuela. However, this presented difficulties as a plant designed for the wet-process was desired and few, if any, used wet-process plants, are available. Plants which use the dry-process are available, however, but there may be some question as to whether the quality of the raw materials at Guanta is sufficiently high for production of cement by the dry-process. After the question of the quality of raw materials was discussed at some length, Mr. Mendoza indicated his willingness to make the results of tests of the limestone rock available to the Foreign Economic Administration. Through such tests, it was expected that a decision could be reached as to whether a used dry-process plant would be acceptable for this project. Subsequently, the decision was made by Mr. Mendoza and his associates to await the time at which a new wet-process plant could be secured for this project. However, efforts will undoubtedly be made to secure approval of the project and priority assistance in the near future.

Construction Equipment

The Ministry of Public Works presented a list of construction equipment with a value of $687,500 for consideration. The majority of the items contained in this list, notably D–8 and D–7 tracklaying tractors, are in exceedingly short supply and are not available other than for military use. However, to facilitate matters it was suggested by the Foreign Economic Administration that these requirements be broken down into the following categories:

Class I	Class II	Class III	Class IV	Class V
Types HD–14	Types D–7	Types HD–7	Types D–4	Types D–2
D–8	HD–10	D–6	TD–9	TD–6
F	TD–14	TD–14	B	H
		D

Perhaps some of the items listed may be furnished but there is little hope that the heavy items can be secured at this time. While the Ministry of Public Works may wish to submit license applications for this equipment, it should be borne in mind that, according to a recent War Production Board order, practically all new construction machinery is now needed by the military services and civilian demand must be filled from idle used equipment. Even used equipment cannot be purchased unless a release is secured from the War Production Board. A copy of this recent order which was released on January 18, 1944 is attached hereto³³ for the information of the Embassy.

La Guaira Port Project

This project was approved on Saturday, January 22, 1944 and information in relation to this approval was communicated verbally to the Venezuelan delegation. In as much as this project was stated to be the most urgent of the group discussed between representatives of various governmental agencies in Washington and the delegation, its prompt approval was greatly appreciated.

Agricultural Implements and Livestock

The Venezuelan delegation submitted an extensive list of requirements including heavy equipment, small tools, and livestock. Among the items listed were 84 tractors, including heavy tracklaying tractors which, as noted previously, are not procurable. A total of 46 wheel tractors of 20–30 HP were likewise included. It is possible that the wheel tractors may be obtained. At least the Foreign Economic Administration would entertain an application for these units.

According to the War Production Board, certain items included in the list lack clear definition and specifications and as a result it is impossible to give an opinion as to the supply difficulties which might be encountered. Among these items are the following: 1 complete stable, 2 pasteurizing and bottling installations, 4 silos, and 70 Australian tanks. If more complete information could be given on these items some indication might be forthcoming as to whether procurement would be possible at this time. The same difficulties apply to the 40 portable milk refrigeration plants. Without specific itemization of the desired equipment for these plants, the War Production Board was unable to indicate its attitude towards this request or the probable delivery date if orders were placed and applications were made for export licenses and priority assistance.

Certain of the items, for instance the cold storage plants and mechanical sheep shearing machines and hog markers, are not in particularly short supply and therefore could probably be furnished in a relatively short time. On the contrary, the three drilling outfits will probably present considerable difficulty. Their release is under the jurisdiction of the Petroleum Administrator for War and it is doubtful whether release would be granted at present. In reference to the trucks listed by the Ministry of Agriculture, it may be stated confidentially, for the information of the Embassy, that the Foreign Economic Administration will soon announce a limited allocation of trucks for 1944 to each of the other American republics. It is hoped that the requirements listed both by the Ministry of Public Works and the Ministry of Agriculture may be taken care of within this allocation as the numbers required are not great. Therefore, little difficulty should be experienced in securing the number desired, particularly of trucks of small sizes, if applications are submitted promptly. The jeeps requested cannot be furnished at this time. They are under the control of the War Department and an inquiry elicited the information that jeeps were not available for exportation for non-military purposes.

The livestock requirements should not constitute a particularly difficult problem. Horses, mules and goats are under general license to the other American republics, whereas cattle, hogs and sheep are subject to individual license. If this livestock can be purchased, the Foreign Economic Administration will grant the necessary export licenses. Some difficulty may be experienced in securing the requisite shipping space.

In the list furnished by the Ministry of Agriculture were a substantial number of small tools. However, the individual requirements of each were not excessive. These requirements should not be difficult of procurement. If applications are made to the Foreign Economic Administration, either by the Ministry of Agriculture or by private concerns, and appropriate reference is made in each instance to the list furnished by the Venezuelan delegation, an attempt will be made to furnish the necessary export licenses promptly. The delegation wished to secure these items, among others, without charges to the general allocations. In the case of certain items, among them these small implements, quantities may be provided outside of the regular allocations as the War Production Board indicated to the Foreign Economic Administration that supply assistance would be given if the amounts available to meet these requests were insufficient.

Tire and Tube Requirements

Mr. Mendoza made a strong plea for an additional allocation of tires and tubes. After a considerable discussion of requirements data and of the production possibilities of the General Tire Company plant in Caracas and of retreading plants, it was stated by representatives of the Foreign Economic Administration that the whole matter would again be reviewed but that the supply situation was such that no assurances could be given of additional allocations. There have now been submitted to the Foreign Economic Administration two project applications covering production equipment for camelback. One of these applications likewise covers equipment needed for retreading of tires. While a favorable decision may be reached on one of these applications, it is improbable that both will be granted. The receipt of some additional equipment of this type should materially improve the tire situation in Venezuela.

The conclusion is merited, everything considered, that the Venezuelan delegation met with a sympathetic consideration of the projects and requirements presented on the part of the representatives of the United States Government agencies. Substantial progress was made in meeting the requests of the Venezuelan delegation through the approval of the La Guaira Port project. It is probable that the various sewer and aqueduct projects can at least be started in view of the fact that reinforcing steel and cement are in reasonably free supply and should not occasion great difficulty in procurement. Many of the items listed by the Ministry of Agriculture may likewise be made available and should be accorded export licenses when applications are made unless the supply situation changes in the meantime.

The greatest difficulty, from a procurement angle, is in reference to the heavy equipment needed by the Ministry of Public Works and like equipment by the Ministry of Agriculture. On these heavy items, notably tracklaying tractors, and the heavy equipment with which they are used, the supply situation is such that little hope can be given of immediate procurement other than for used equipment. As mentioned previously, even this requires release by the War Production Board.

In each instance when applications are filed with the Foreign Economic Administration either for projects or individual licenses, the fact that the materials and equipment covered were the subject of discussion between the Venezuelan delegation and representatives of various United States Government agencies should be noted. It should be observed, however, that no definite commitment has been made in regard to approval of these applications by the war agencies. Conditions of supply change quickly and in an unpredictable manner, therefore, final decisions must await the formal submittal of applications to the Foreign Economic Administration and, when necessary, to the War Production Board.

29. Minister of Public Works.
30. Former Minister of National Development.
31. Chief of the Naval Division of the Ministry of War and Navy.
32. See also memorandum of a conversation between President Roosevelt and President Medina on January 19 regarding the establishment of an oil refinery in Venezuela, p. 1660.
33. Not printed.