FOREIGN TRADE: Big Stick

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Up to last week, the U.S. Government had spoken softly in its fight against Britain's restrictions on dollar oil (TIME, Jan. 2 et seq.). Then it decided the time had come to waggle a big financial stick. ECA's petroleum chief, Oscar Bransky, told a House subcommittee that Britain will get no more ECA dollars for expansion of its own oil refining industry until the fight is settled.

With $13,355,000 in ECA funds, British oil companies and associates are building four refineries to boost their output by 33 million barrels of oil a year. They want another $30 million to add 46.5 million more barrels. That request, said Bransky, had been put on ice indefinitely. But "we are still hopeful," he added, "that a satisfactory outcome will be obtained."

U.S. oilmen, estimating that the restrictions on dollar oil have cost them roughly $6,000,000, have already rejected as discriminatory one British compromise proposal—to permit U.S. companies to boost their sales in proportion to any additional dollars they spend in sterling area countries. And they still believe that Britain is less interested in saving dollars than in using its ECA-created oil surplus to drive the U.S. out of existing markets. Nevertheless the State Department is still trying to work out some formula that will meet the British need for saving dollars and still permit the U.S. to compete on equal terms in the world oil market. But Texas' Senator Tom Connally last week decided the time had come to get tough. With his Foreign Relations Committee holding a whip hand over ECA's new $2.9 billion appropriation, Connally announced that he would seek to block all further aid to Britain unless it abandons its "discrimination" against U.S. oil.