1 Yearbook of International Trade Statistics, 1956, VI. II, United Nations, 1957, Table C, p. 24, Table A, p. 9; Directions of International Trade, United Nations, December, 1957, p. 6-7. In “Latin American Trade with the Common Market Countries of Europe,” Economic Bulletin for Latin America, United Nations, Santiago, Chile, March, 1959, it is noted that since the Second World War, economic expansion in the United States and Europe has contributed directly to the large and growing volume of Latin America's export trade, (p. 10).

2 Economic Bulletin for Latin America, March, 1958, p. 4. This account brings up to date an earlier study of the shift in trade, A Study of Trade between Latin America and Europe, prepared by the Economic Commission for Latin America, The Economic Commission for Europe and the Food and Agriculture Organization, United Nations, Geneva, 1953.

3 “A Preview of Economic Situation in Latin America during 1956”, Economic Bulletin for Latin America, United Nations, February, 1957, p. 12. In the World Economic Survey, 1956, II, Preliminary edition, United Nations, 1957, it notes that North America secured around 70 per cent of its petroleum imports and 60 per cent of its base metal imports from Latin America in the 1955-1956 period, (pp. 5-5, 5-6).

4 World Economic Survey, 1956, Part II, pre. ed., Ch. II, Table I, p. 5-10, “Latin American Customers,” The Economist (London), February 6, 1954, p. 373; Economic Survey of Europe, 1957, United Nations, Geneva, 1958, Ch. IV, p. 7; Survey of Current Business, U.S. Department of Commerce, Washington, D.C., December, 1956, pp. 10-12.

5 “Latin American Trade with Common Market Countries,” “Economic Bulletin for Latin America, March, 1959, p. 11; final edition, World Economic Survey, 1956, United Nations, 1957, pp. 137 and 103, Tables 40-41. See also Europe To-Day and in I960, VI. I, O.E.E.C., Paris, 1957 for changes in imports ot industrial sectors in the European economy, Table 4, p. 23; and further comments on the plight of the food exporting countries in Latin America, Galo Plaza, “For a Regional Market in Latin America,” Foreign Affairs, July 1959, p. 609.

6 “A Single Trading World?” The Economist (London), October 11, 1958, p. 119.

7 Economic Survey of Latin America, 1957, United Nations, New York, 1959, pp. 46-48; Economic Survey of Latin America, 1956, pp. 19-20; 20-30; 48-49; Yearbook of International Statistics, pp. 52-58.

8 Data on Venezuela's gold reserves may be found in the Report of the National Council on International Monetary and Financial Problems, Washington, D.C., January 7, 1957, Table Bl, pp. 30-31; International Financial Statistics, International Monetary Fund, July 1959, pp. 256-257; World Economic Survey, 1957, United Nations, New York, 1958, p. 185.

9 Apart from such investments and periodic loans from the Export-Import Bank and the International Bank for Reconstruction and Development as well, Latin America as a region would have experienced a serious deficiency in development capital during the post war period. For not merely a shortage of capital in portfolio form persisted throughout these years, but a withdrawal of British and European funds also took place between 1945 and 1953, largely as a consequence of the repurchase by Latin American governments of foreign-controlled railroads and public utilities and of their policy of discouraging portfolio investments from any foreign source. See also Mikesell, Raymond F., Foreign Investment in Latin America, Pan American Union, Washington, D.C., 1955, pp. 5–6 Google Scholar; Foreign Capital in Latin America, United Nations, New York, 1955, pp. 10-12; The International Flow of Private Capital, United Nations, June 1958, pp. 22-25 and p. 65; Economic Survey of Latin America, 1957. Here it is noted that although the flow of capital to Latin America was a mere trickle during the 1930's and the Second World War, the trend since 1946 has, in spite of occasional declines, been definitely upward and the increase has consisted mainly in direct foreign investments in the petroleum industry, (p. 51) Elsewhere, in Foreign Affairs, July, 1959, that private foreign capital is insufficient for the development of transportation and public utilities now needed to meet the growing population and industrial requirements of the region, (p. 600).

10 Economic Survey of Latin America, 1956, p. 47. Note Maffrey, August, “Direct Versus Portfolio Investments and the Balance of Payments,” American Economic Review, May, 1959, pp. 621–624 Google Scholar; and the participation of overseas capital in Brazil's national petroleum monopoly, The New York Times, Monday, August 25, 1958, p. 8.

11 Data for 1946 from Foreign Investments of the United States, U.S. Department of Commerce, 1953, p. 48; other figures from Samuel Pizer and Frederick Cutler, U.S. Investments in Latin America, U.S. Department of Commerce, Washington, D. C, 1957, Table 2, p. 111; Table 16, p. 189. The E.C.L.A. reports in Foreign Capital in Latin America that over the period 1919 to 1952, U.S. direct investments in Venezuela increased from some $20 million to $1,200 million, p. 144. For an overall picture of U.S. investments abroad and the comparative position of Venezuela, see Balance of Payments; Statistical Supplements, U.S Department of Commerce, 1958, pp. 137-165. The proportionate shares of each of the principal foreign investing countries as regards Venezuela may be found in Memoria Correspondiente al ejercicio anual 1952, Central Bank of Venezuela, Caracas, 1953. Here (p. 126) it appears that the share of the Netherlands was about one-half and of the United Kingdom one-fourth of the total amount of the direct investments of the United States in Venezuela. In 1956, the United Kingdom's share dropped to one-tenth of the total direct investments in Venezuela that year.

12 “In Venezuela, which has the largest difference between gross investment and change in net book value, the increase in book value (in 1955) was about $60 million while in capital expenditures by companies reporting in this survey, was about $276 million.” C7.S. Investments in the Latin American Economy, p. 25. See also Foreign Investments: Recent Developments and Proposals for an Inter- American Financial Institution, Pan American Union, Washington, D.C., 1957, p. 3; Emilio Collado and Jack F. Bennett, “Private Investment and Economic Development,” Foreign Affairs, July-August, 1957, pp. 663-668.

13 The International Flow of Private Capital, 1957, p. 67. Here it should be added that the United States provided one-half of the $4,000 million total private gross investment outstanding in Venezuela in 1955, with the Netherlands and the United Kingdom supplying 23 and 10 per cent respectively, (pp. 65-67). In the World Economic Survey, 1955, United Nations, 1956, it is noted (p. 83) that although the direct investments of the United States in the Western Hemisphere have remained around 70 per cent of its total outlays in this area, a large proportion of all the new direct investments — more than half from 1952 to 1957 — has gone to Canada. This percentage compares favorably with Canada's share of just onequarter of the total in 1929. Yet, as the Balance of Payments: Statistical Survey, 1958 indicates, the petroleum leases in Venezuela during 1956 and 1957 brought this country's share in the new direct investments of the United States close to that of Canada, with $1,411 million going to Venezuela and $1,752 million to Canada in 1956 (p. 156).

14 See Annual Report of the Petroleum Industry for 1956, The Chase Manhattan Bank of New York, July 1957 pp. 7-8 regarding long term developments in petroleum; also The International Flow of Capital, 1957, pp. 13-23; 62-65; and Yearbook of International Trade Statistics, 1956, VI. II, pp. 52-116. The Economic Survey of Latin America, 1956 notes that petroleum has been favored by a strong market since World War II because the world income-elasticity of demand for petroleum is high and, in addition, a rising trend in consumption has taken place in countries, such as Argentina and Brazil, irrespective of income (p. 139) Cf., too, Inter-Latin American Trade: Current Problems, United Nations, 1957, p. 49; Directions of International Trade, p. 24.

15 Economic Bulletin for Latin America, United Nations, October, 1957, p. 121; Economic Survey of Latin America, 1955, p. 7; Intra-Latin American Trade: Current Problems, p. 100. It should be noted also that in the more advanced Latin American economies, policies of coordination were followed while in the less advanced countries, overall programs called fomentos, some of which appeared in the 1930's, were put into effect in these years.

16 Economic Survey of Latin America, 1957, p. 91; see also Carl Rieser, “Latin America: Pains of Growth,” Fortune, February, 1958, pp. 116-117.

17 Economic Survey of Latin America, 1957, p. 94.

18 Economic Survey of Latin America, 1956, pp. 115-116; Intra-Latin American Trade: Current Problems, p. 100.

19 Economic Survey of Latin America, 1956, p. 77; Economic Survey of Latin America, 1954, p. 200.

20 Economic Survey of Latin America, 1957, pp. 95-96.

21 Economic Survey of Latin America, 1956, p. 139; Charles E. Rollins, “Economic Development of Venezuela,” “Economic Development and Cultural Change, November 1952, p. 83.

22 Bauer, P. T. and Yamey, B. S., The Economics of Underdeveloped Countries, London, 1957, p. 160.Google Scholar

23 The two main areas of oil concentration in the world, one in the Western Hemisphere, in the Gulf Coast, the Caribbean and the Mid-Continent, and the other in the Eastern Hemisphere along the Black and Caspian seas and Persian Gulf encompass almost land-locked bodies of salt water that have afforded an ideal environment for the development of petroleum and contain the largest known reserves, Woytinsky, W. S. and Woytinsky, E. S., World Population and Production, New York 1953, p. 884 Google Scholar.

24 Investments in Venezuela, U.S. Department of Congress, Washington, D.C., n.d., p. 53. See Rayburn, John C., “U.S. Investments in Venezuelan Asphalts,” Inter-American Affairs, Summer, 1953, p. 36 Google Scholar and Rollins, Charles E., “Mineral Development and Economic Growth,” Social Research, October, 1956, p. 272 Google Scholar. In recent years much of the investment in the petroleum industry has been of a manufacturing rather than of an extractive character, with large outlays being placed — and often at the request of oil producing countries themselves — in facilities for refining and distribution near the sources of production. Pizer, Samuel and Cutler, Frederick, “Recent Growth in Foreign Investment”, Survey of Current Business, U.S. Department of Commerce, August 1957, p. 23 Google Scholar.

25 United States Oil Imports, Petroleum Industry Research Foundation, Inc., New York, 1958, pp. 11-17; Petroleum Industry in War and Peace, Papers presented by the Petroleum Administration for War, Washington, D.C., November, 1945, p. 65. See also Hansen, Simon G., Economic Development of Latin America, Washington, D.C., 1951, p. 264.Google Scholar

26 Economic Survey of Europe, 1957, United Nations, Geneva, 1958, Ch. IV, p. 7. The share of petroleum producers in the total exports of a selected group of primary exporting countries rose from 7 per cent in 1937-1938 to 24 per cent in 1956 while those of agricultural and raw material producers declined from 82 to 63 per cent in the same period. Had Venezuela been included in the group selected for study, the contrast between these two sets of figures would have been even more striking. See also in this same survey, Table 2, Ch. IV, p. 7.

27 “The Economic Impact of the Suez Crisis,” Europe To-Day and in 1960, VI. I, p. 51. (See also “The Impact of the Suez Crisis,” World Economic Survey, 1956, pp. 148-151; “Less Money for Oil,” The Economist (London), May 3, 1958, p. 421; and Walter Lederer, “Developments in the U.S. Balance of Payments,” Survey of Current Business, March, 1957, pp. 11-12). Tankers returning from Europe and the Mediterranean were sent to the Caribbean to take on crude and derivatives for Uruguay, Brazil and Argentina; alternatively, when crude oil from the Persian Gulf was shipped to the east coast of South America, the tankers proceeded in ballast to the Caribbean to take on supplies for Europe and the Mediterranean ports. “Impact of the Crisis in the Middle East on South American Supplies of Petroleum and Derivatives,” Economic Survey of Latin America, 1956, pp. 29-32.

In Hearings held after the crisis, the Independent Petroleum Association of the United States showed itself dissatisfied with the way in which the emergency had been met. (See Joint Hearings on Emergency Oil Lift Program and Related Oil Problems, S. Res. 37, 85th Congress, 1957) the association declared that although the oil lift was profitable to those who participated in it, namely, large U.S. corporations with overseas affiliates, the program as directed by the Middle East Emergency Committee, failed, nontheless, to divert a sufficient amount of Caribbean oil from the U.S. to Europe — and this, regardless of Venezuela's being closer to Europe than were the Gulf states. (Part I, pp. 337-338). The M.E.E.C. conceded that a maximum saving of tankers would have resulted if no U.S. crude had moved to Europe — the shortage in Europe being one of crude, not petrol — but was shipped instead to the east coast of the United States to replace Venezuelan imports that could have then been allocated in larger amounts to the Eastern Hemisphere. (Part II, p. 1118). At the same time, however, the committee insisted that an increase in imports from Venezuela to the U.S. was both necessary and justified since it offset the stoppages of shipments from the Middle East and helped to meet problems of crude quality. For the difficulties of securing on short notice for U.S. industries on the east coast sufficient domestic products of the proper quality to replace special types of Venezuelan crudes, were, in the opinion of the committee as opposed to that of the independent producers, truly formidable. (Part III, pp. 1813-1818 and Part II, p. 1118.)

28 In Commodity Survey, 1958, Commission on International Commodity Trends, United Nations, New York, 1959, it is noted (p. 150) that the steady replacement of solid fuels by liquid fuels, especially in Western Europe, has been as much of a characteristic of the postwar decade as the remarkable expansion occurring in the petroleum industry.

29 See “The Emergence of Order out of Chaos,” World Oil, Anniversary Issue, January, 1959, p. 149; Commodity Survey, 1957, United Nations, 1938, p. 21. See also footnote, p. 29, Energy in Latin America, United Nations, Geneva, 1957. A discussion of the increased use of American coal in Europe — from 30 million tons in 1955 to almost 50 million in 1957 — with respect to Europe's gradual conversion from coal to oil is found in Duncan Burn, “The Changing Oil Situation,” Lloyds Bank Review, October, 1958, pp. 23-33. The O.E.E.C. in its 10th Annual Economic Review, Policies for Sound Economic Growth, Paris, March, 1959, states: “The maintenance of this volume of import, in spite of the heavy increases in pithead stocks, is attributable to two main courses: on the one hand, it arises from long term contracts with the United States and on the other, from the fact that the landed costs of the United States coal fell, in 1958, below that of some of the Community (European Coal and Steel Community) producers… And it will be noted that the longer term trend toward an increased use of other forms of energy, notably of oil, which was checked in 1957 as a result of the Suez crisis, was resumed in 19o8.” (pp. 35-36. See also Table XIV, p. 75).

30 See “United States Imports of Petroleum and the Domestic Industry,” Foreign Trade Policy, Sub-committee on Foreign Trade Policy, Washington, D.C., 1957, p. 1064.

31 Raciti, Sebastian, The Oil Import Problem, Fordham University Press, New York, 1959.Google Scholar

32 Sheldon, Ruth, “Venezuelan Oil Policy may affect the World Situation,” World Petroleum, July, 1946, p. 36 Google Scholar. Fanning, Leonard M., Foreign Oil in the Free World, New York, 1957 observes (pp. 93–95)Google Scholar that although the 50-50 principle was neither mandatory nor operative until the change in the income-tax law of 1948 and legislation in 1949 with regard to an additional 50 per cent tax on the excess profits of the oil companies, it was, notwithstanding, basic to the considerations that prompted the Petroleum Act of 1943. (It should be noted at this point, too, that the 50-50 principle was only implicit in the 1943-1948 legislation rather than explicitly expressed, as in the case of subsequent agreements between the oil industry and other producing countries.) Some idea of the importance of this legislation may be found in the following: “The principle of an equal division of profits between the country owning the oil resources and the foreign company exploiting them was first established in Venezuela after the second world war; today it prevails in every large producing area. There are some exceptions: countries where little or no oil has been found have tried to entice oil companies into risky exploration by offering them more favorable terms; others, like Italy, have scared foreign oil companies away by legislation that appears to be more onerous than fifty-fifty.” “Fifty-Fifty in Oil,” The Economist (London), January 18, 1958, p. 230.

33 “World Exploration Boom,” World Petroleum, September, 1958, p. 67; “World Refining Boom,” World Petroleum: World Refining Review Number, July 15, 1959, p. 51.

34 Burck, Gilbert, “A Strange New Plan for Oil,” Fortune, August, 1959, p. 95.Google Scholar

35 World Petroleum, January, 1959, p. 16. The companies argue here that Venezuela's action with regard to the 50-50 principle ignored the moral, if not the legal, obligation to negotiate the change in taxes with interested parties. Thomas Delate, “New Income Tax Law breaks the 50-50”, World Petroleum, July, 1959 adds (p. 58) that the companies must now compute their taxable income according to accounting rules, which, unlike those applicable to the 50-50, ignore the international character of the oil business. The viewpoint of Venezuela, again, is ably put forward by Juan Pablo Pérez Alfonso, Minister of Mines and Hydrocarbons, in “Oil is not Everything — A Realistic Appraisal of Venezuela's Present Situation,” Ibid., pp. 36-30. In “Breaking the Missing Principle,” The Economist (London) January 3, 1959, it is noted; “The Venezuelan move violated no contract, even though its arbitrary character certainly violated all past intentions. But a sovereign government is entitled to impose taxes, and if by doing so, Venezuela makes its oil less attractive to produce, it must accept the consequences.”

36 Gilbert Burck, op. cit., p. 95.

37 Commodity Survey, 1957, p. 91. On a regional basis, the increase in petroleum from 1937 to 1954 was as follows: Oceana, 72 per cent; Africa, 110 per cent; Latin America, 185 per cent; the Middle East, 706 per cent.

38 Peaceful Uses of Atomic Energy, p. 267. Among the numerous estimates of energy requirements in the future, some of the more useful are: International Trade, 1956, Contracting parties to GATT, Geneva, June 1957, p. 21; Coqueron, Frederick G., Hammar, Harold D. and Winger, John G., Future Growth in the World Petroleum Industry, Chase Manhattan Bank, New York, November, 1958, pp. 19–36 Google Scholar; and in addition, Europe Today and in 1960, VI. II, O.E.E.C, Paris, April, 1957, Putnam, P. C., Energy in the Future, New York, 1957 Google Scholar and Aubrey, Henry C., United States Imports and World Trade, Oxford, 1957 Google Scholar. Although some have stated more recently that the gloomy predictions of a painful shortage of fuel by the middle sixties were unwarranted and that the present abundance of oil is no temporary affair that will end with the American recessions (“Oil in the Middle East,” The Economist, (London), March 29, 1958, p. 1151) others have held that the long term demand for petroleum in the United States will resume its annual growth of 4 per cent registered in 1951-1956 and that overseas areas where exports consist largely of petroleum and metal ores, such as dollar Latin America and the Middle East, may well double their exports between 1956 and 1957. (Economic Survey of Latin America, 1957, p. 47; Economic Survey of Europe, 1957, Ch. IV, p. 13.)

39 “Rostow on Growth,” The Economist (London), August 15, 1959, p. 412.

40 Rollins, op. cit., p. 270; Collado and Bennett, op. cit., pp. 630-632.

41 “Venezuela Spurs Arab Talks,” The New York Times, April 18, 1959, p. 6; The Economist (London) March 28, 1958, p. 1151; “Oil Congress in Cairo,” The Economist (London), April 18, 1959, pp. 251-254; Gilbert Burck, op. cit., pp. 94-96.

42 See “What Markets for Canada's Oil?” The Economist (London), September 12, 1959, pp. 836-841.

43 Huttlinger, Joseph B., “Washington Pipe Line,” World Petroleum, July 1959, p. 4 Google Scholar. With reference to the more general problem of import quotas, Professor Edward S. Mason, testifying in 1956 before a Congressional committee stated that . .. “oil may well represent a special case justifying import limitations for defense purposes …” Foreign Trade Policy, p. 1068 and Raciti, op. cit., reminds the major international oil corporations, that if foreign oil is to benefit in an expanding market in the future, it must share in the losses of the present period of over-supply, (p. 99) The E.C.L.A., again, in the Economic Survey of Latin America, 1957 holds that the present restrictions are probably only temporary measures — a view borne out by the fact that independent oil producers in the United States, the group most insistent upon lower import quotas, have recently increased their share of investment in Venezuela and other overseas oil areas, (footnote, p. 47)

44 “South America,” World Petroleum Report, 1959, February 15, 1959, p. 133.