Oral History Interview with
Economist and economic adviser, petroleum board, Office Price Administration, Washington, 1942-45; assistant chief, petroleum division, U.S. Department of State, 1945-48, chief, 1948-50, chief petroleum staff, 1950-54, fuels division, 1954-56; economic counselor American Embassy, Santiago, Chile, 1956-59, Caracas, Venezuela, 1959-62, counselor in Rio De Janeiro, Brazil, 1963.
Robert H. S. Eakens
June 13, 1974
by Richard D. McKinzie
[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.
Numbers appearing in square brackets (ex. ) within the transcript indicate
the pagination in the original, hardcopy version of the oral history interview.
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.
Opened March, 1979
Harry S. Truman Library
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Oral History Interview with
Robert H. S. Eakens
June 13, 1974
by Richard D. McKinzie
MCKINZIE: Mr. Eakens, one of the first things that I'd like to ask is how you happened to get into government service. I know that you went to the University of Texas and wrote a masters thesis on the oil industry in the State of Texas, and maybe you could even relate how you happened to get interested in oil.
EAKENS: Well, I guess it's best to start with my interest in oil. After I got out of the university I taught school a couple of years at Leander, and then I taught for two more years in the Kilgore High School. Kilgore is in the middle of the largest oil field in the United
States and that's actually where my interest in oil began. After completing my masters thesis on the development of proration in the East Texas oil field, I was offered a halftime instructorship at the University of Texas to work on my Ph.D.
Two weeks after school had started in the fall of 1937, the chairman of our department arrived for duty. He had been working in Baltimore for a company by the name of the American Trading and Production Corporation, which was the family holding company of the Blavstein family. This company was suing Standard Oil Company of Indiana and all of their officers, and also some of the officers of Standard Oil Company of New Jersey, over a breach of judiciary relationships towards minority stockholders, which the Blavstein's had become in some merger arrangements with Standard of Indiana. That continued my interest in oil, and I spent three years there.
MCKINZIE: Did your department chairman ask you then to go back with him to Baltimore?
EAKENS: Yes. The people at the university were very kind to me. A halftime instructor working on his Ph.D. doesn't have any kind of status -- didn't then and I'm sure he doesn't now. But they said that they would be glad to release me and give me my instructorship back at the end of the year.
Well, at the end of the first year in Baltimore (we were in our lawsuit in New York City) the company wanted me to stay another year, and the economics department here at Texas offered to let me stay another year and give me my job back then.
When this job lasted the third year, I decided not to come back to Texas. I did get a university fellowship in economics at Columbia and spent a year there completing all
my work for a Ph.D. While I was there the war came along, and I let that interrupt my dissertation writing and never did write one, like a lot of other people, I guess.
I fully expected to be drafted, because Pearl Harbor had occurred while we were in Columbia. We moved to Washington in the summer of '42 with the expectation that I'd be drafted and my wife could get a job in the Government; she had worked some in New York for the Army. So, I went to work for OPA. During that time I fully expected to go in the service; I applied for a commission in the Navy and did have all of the qualifications, but they finally turned me down because I had a history of small kidney stones. Then when I was drafted, they turned me down for the same reason, so I ended up staying in Washington.
I was at OPA until October of 1944, and at that time petroleum was a real problem in
international affairs. A person whom I knew was in the petroleum division of the State Department and made me an attractive offer to transfer from OPA to the Petroleum Division of the State Department as Assistant Chief.
That sort of tells how I got into oil, into Government, and into oil in the State Department.
So, I have had a good deal of background in the economic side of oil. I believe I was still Assistant Chief of the Petroleum Division when President Roosevelt died and President Truman came into office, in April 1945. At that time our division was in the old State, War, and Navy Building right next to the White House. Possibly a little later we moved to 1818 H Street. I believe we were in those two locations, and possibly another one, during all of President Truman's time as President.
MCKINZIE: The International Bank's now at 1818 H Street.
EAKENS: That's exactly right. The International Bank took over our offices at 1818 H. I think the State Department had that whole building prior to the time the International Bank took it over.
MCKINZIE: When you went over to that office after October of 1944, did you have any feeling about how President Roosevelt thought about oil? I've seen some things that said he was really worried that oil was going to be a problem in the future and that that influenced his diplomacy, especially with the Middle East.
EAKENS: Oil was a real problem for the State Department at the time I went over there and until well after the war was over. Our friends in foreign countries had difficulty in getting
oil supplies. Take, for example, a country like Brazil. Most all of the oil available to the Allies was under allocation no matter where it was produced. I sat on an oil allocation committee, representing the State Department. It was chaired by an official of the Petroleum Administration for War. The Brazilian Embassy would present us a request for a tanker of gasoline or a tanker of fuel oil, and this request would go before the Oil Allocation Committee. We would decide whether and how much oil we could give Brazil. This occupied a great deal of our time until the war was over, and, in fact, the Petroleum Division in the State Department had probably six or eight officers working on oil. A lot of this was on allocation, but also we were trying to do what was possible to encourage the production of additional oil, from the State Department's standpoint, outside the United
States but in friendly countries. Steel was under allocation - virtually everything that was needed to produce oil was also under allocation. So, we were concerned, along with the Interior Department, which had the main responsibility, and, in the Interior Department, the Petroleum Administration for War, with oil allocation, encouraging oil production, and oil finding, to the extent that materials could be made available for exploration. All of these things involved the State Department when these activities were overseas.
MCKINZIE: Harold Ickes, I know, wanted the U.S. to buy into Aramco very heavily at one point. Did that concern you, or was that already over at the time that you took that division?
EAKENS: I don't believe the question of the Government buying into Aramco came up during my time in the Petroleum Division or subsequently as
Chief of the Petroleum Division (eventually it became the Fuels Division; our name changed several times during this period). I was in petroleum in the State Department for 12 years, from '44 to '56; so I was in the Petroleum Division all during President Truman's time in the White House.
Following the war there were also problems of oil field equipment allocations, which continued a long time, as I remember. I know one problem that we sat on and probably made a mistake on was getting an allocation of steel to build the trans-Arabian pipeline from the Persian Gulf to the Mediterranean. In retrospect, I think that was a serious mistake because of the political problems which have been encountered by the pipeline. The pipeline not only went through Saudi Arabia, but it went through Syria and Lebanon. Either one of these countries could
cut off the flow of oil through the line -- and did. If the same amount of steel had gone for the construction of tankers, our entire relationship would have been solely with Saudi Arabia. During this time we were naturally trying to protect investments in oil and trying to -- once the pipeline was built -- insure the continued flow of the oil. I don't remember exactly, but I think that line was completed before '53, when President Truman went out of office, but the serious problems of the line occurred after that. One thing that did occupy a great deal of our time was relationships with countries like Saudi Arabia.
MCKINZIE: How did that work? Did someone from the political side of the State Department come down and confer with you and your people, or did you arrive at independent judgments which then reached the political people?
EAKENS: We were the State Department experts on oil, and I would say, in general, that we acted sort of in a staff capacity. Very few meetings were held by, say, the Assistant Secretary of State for Near Eastern Affairs without inviting us to be present, because nearly all of the problems of Saudi Arabia involved oil in one way or another. This was also true of many of the other countries; so that I guess we did sit in all of the discussions involving oil with all of the bureaus. And when the problem involved just mainly oil, we were usually the initiator of the action, rather than the political office. During my time in the State Department, I drafted hundreds of telegrams and signed the Secretary of State's name to them, but it was my responsibility to have the proper clearance of anyone in the State Department who should know about it and agree with the policy.
I remember on one occasion the Assistant Secretary of State for Latin America and I were working on an oil problem. I drafted a cable and assumed he would sign it as Assistant Secretary of State for Latin America. When we finally finished our consultation he said, "Well, if you'll sign it, I'll approve it," which I did. So, our relationships were very close with the geographical bureaus. During a lot of this time Loy Henderson was chief of the Office of Near Eastern Affairs and later became Assistant Secretary for Near Eastern Affairs.
MCKINZIE: Do you think the Near Eastern bureau appreciated the importance of oil in dealing with the Middle East?
EAKENS: I think they did at that time. As I mentioned earlier, up until the time I went on an overseas assignment in May 1955, I don't recall but that we had the most cordial
relationships with Saudi Arabia, Kuwait, and the oil producing countries of the area. It was mainly Saudi Arabia and Kuwait at that time, and Qatar had come in in the early fifties.
I made a trip to the Middle East in February of '52 with an officer of the geographic bureau and some military people. We went to Kuwait, Saudi Arabia, Bahrain, and Qatar, which apart from Iran were the main oil producing countries in the Middle East.
MCKINZIE: You mentioned the cordial relationship between the Middle Eastern people and your office. How about the military? James Forrestal, for example, argued in late 45 and early '46 that the U.S. could not fight another war for more than three years without outside oil supplies and without some way of safeguarding them. That puts a pretty heavy responsibility on somebody to take steps to insure
that oil is going to be there and going to be protected. Was that a function of your office, to keep reminding people of this situation?
EAKENS: I would say so. We encouraged American companies to go overseas and explore for oil.
MCKINZIE: Now, how could you do that? Just by other than saying to some official of the company, "You're going to find some oil," what kinds of inducements was it possible to make?
EAKENS: Well, I guess one thing is that many American companies who have not been in overseas operations for some time are a little reluctant to invest overseas unless they think they've got the support of the State Department, however valuable or however not valuable this support might be. So, we spent a great deal of time talking to American oil producers who were either going overseas or were interested in
going overseas. We called their attention to opportunities which existed overseas. One very clear and specific one is the neutral zone between Saudi Arabia and Kuwait. The neutral zone is a territory between Saudi Arabia and Kuwait of some 25,000 square miles, in which there were no permanent residents. The tribes of Kuwait and Saudi Arabia would migrate in and out of this neutral zone, and the oil rights to the neutral zone were held jointly, 50-50, by Saudi Arabia and by Kuwait.
I don't know how this got started exactly, whether Kuwait expressed the interest or just what, but the question came up of leasing the oil rights of each of the countries. We brought this to the attention of a great many oil companies, who went over and talked to the Kuwaitis. Eventually the American Independent Oil Company took a lease on the interest of Kuwait, and the Getty interests took the lease
on the interest of Saudi Arabia. This neutral zone had never had a well drilled in it at the time; it had never really been explored, but today it's producing several hundred thousand barrels of oil per day.
Now, our action was largely one of information, encouragement, bringing the opportunity to the attention of oil companies, and things like that.
In the case of Iran -- and this probably occurred before '53, although I'm not sure -- the Iranian oil compa