195.2/8–1849
Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth) to the Secretary of State
In connection with the use of American tankers to carry oil from Constanza, Rumania to Dairen, further investigation has uncovered a letter received by the Shipping Division on August 20 from the firm of Sieling & Jarvis in New York57 which operates the SS Kettleman Hills. This letter refers to an oral assurance given on June 15 to the writer by an officer of the Department to the effect that there was no objection to the chartering of this tanker to the USSR for this run. There was at the time and is now no statutory objection nor, to my knowledge, any established policy which this charter violated.
The letter under reference contains the following paragraph:
“Since obtaining the above assurance, we have made other charters with various bureaus of U.S.S.R. and, naturally, will continue to do business with them until, as intelligent citizens of the United States of America, we are on notice that to do so will harm our nation in any way, or, until we are notified by you or other competent authority to desist.”
Under all the circumstances it seems clear that in order to remove the SS Kettleman Hills from this traffic it will be necessary for the Department or some other agency of the Government to make a direct request to the operators. In fairness to them similar action should be taken to prevent other American tanker owners or operators from concluding similar charters. In this connection, I am informed that the rates for this run carry a 50 per cent premium. Finally, in fairness to American shipping and in order to assure the achievement of our presumed objective of cutting off all sea-borne petroleum supplies to Manchuria, we should promptly seek agreement of the Norwegian, Danish and other friendly governments owning a surplus tanker tonnage to refrain from permitting their tankers to be used for this purpose.
- Not printed.↩