 The National Broadcasting Company and its affiliated independent stations present the Pacific story. This is the story of the Pacific, the drama of the millions of people who live around this greatest sea, where the United States is now committed to a long-term policy of securing the peace. This is the background story of the events in the Pacific and their meaning to us and to the generations to come. Tonight's Pacific story comes to you as another public service with drama of the past and present and an interview with Ralph K. Davies, outstanding authority on petroleum and deputy petroleum administrator for war. Black gold in the Pacific, music to my ears, rotary drill making holes, drilling down for rock and shale and sand to bring out oil. Yep, it's music to my ears, but not particularly sweet music right now. I've just come back from a tour of the Pacific. I thought you might be interested in what I found out. It will concern you all the rest of your life. A lot of changes have taken place out there and today the two most powerful nations on earth, Russia and the United States, which happen to face each other across the Pacific, are the two leading producers of petroleum in the world. Now that may not seem important just off the bat, not until you remember what Lord Kersen said at the close of World War I. The World War was won by the Allies, not only by blood, but by oil. And what Winston Churchill said. The Allies floated on the sea of oil to victory. Or what one of our ablest and most resourceful enemies said. It was chiefly because of insufficient oil reserves that the German general staff was forced to sue for peace. That's what General Ludendorff said after World War I. And what was true in World War I was true many times over in World War II. World War II was fought with tens of thousands of planes, hundreds of thousands of tanks, trucks, half-tracks, bulldozers, motor transport of all kinds, and hundreds of submarines, battleships, and aircraft carriers. So every time you hear a sound like this, you know that you're burning up substance that cannot be replaced. In this war it got to be a matter of who had the petroleum. Hitler did everything he could to see that he had enough. And so did Japan, as you'll see. The point is, modern nations must have petroleum. Of all the major nations of the world, only the United States and Russia have enough petroleum within their own borders to supply their military forces. I'm an oil man, been in it all my life. Started as a rough neck, worked as a toolian and driller on cable tools, then broke in on rotary drilling. Worked as a derrick man, pump man, boiler man, tooldresser, and the driller. Done everything from wildcatting and swabbing out wells, releasing oil lands and running an oil-royalty business. That's why I'm interested in the petroleum situation in the Pacific. America provided about 95% of the aviation gasoline used by the Allies in World War II. That'll give you an idea. It was not because there was more petroleum in the United States than in other parts of the world. It was because we had the know-how and the technical facilities to produce it. It was the same in World War I. Ask this statistician. The United States furnished about 80% of the petroleum used by the Allies in the First World War, but Russia at that time furnished very little. At the time of World War I, the Near East Fields of Iran, Iraq, Arabia, and Egypt were not yet developed. In 1940, however, the Near East Fields produced more than 122 million barrels. That's the statistician again. But against this, in 1940, Russia produced 250 million barrels. Nearly twice as much as produced in the Near East. And the same year, 1940, the United States produced more than 1,300 million barrels. In other words, the United States produced more than six times as much petroleum as Russia in 1940. But forget those numbers for a minute. By 1940, the scramble for oil in the Pacific was on. Every country was taking stock of what it had and angling for more. We are somewhat encouraged. That's what the Chinese said. They told the existence of some petroleum in five provinces. Some petroleum, but not one millionth of what China needed. No luck yet. This was Australian. We've found some evidence of the presence of petroleum, but that's about all. That's the way it went. A little in New Guinea, none in New Zealand. Some in Japan and in the territories controlled by Japan, but not enough. As far back as the early 30s, Japan set about to get petroleum. As you know, the 5-hour-free naval ratio has been a thorn in the side of Japan. Japan agreed to attend the Tsugu against our battle judgment. It was accepted as the most satisfactory way to deal with naval ratios by Japan, as well as the United States and Britain. Japan would perhaps be willing to continue with this treaty arrangement if Britain and America would be willing to make some, uh, a concession. The concession the Japanese wanted was an oil supply of her own. Perhaps Britain and the United States could, uh, persuade Holland to cede or lease some of the oil fields of the East Indies to Japan. I talk with influential Japanese at that time. It is only the British support that keeps the Dutch in the East Indies. Is it not so, Mr. Rims? Well, there's a lot of British capital in the Indies, of course. Yes. Therefore, if the British were willing, the Dutch perhaps could be persuaded to lease some of the East Indies oil fields to Japan. The Japanese knew that the Indies were the oil center of the Pacific. They knew that the Indies were Japan's closest important source. By this time, the Japanese had taken Manchuria and were preparing for the showdown in the Pacific. Under this new plan, which will be mandated as law, all foreigners who sell petroleum products to Japan will be required to maintain a reserve equivalent to six months' supply. Six months' reserve? Where would we keep it? Our tanks would have to be erected at your expense. And what would these reserves be for? For emergency use by the Imperial Navy. Look here, erecting tanks to hold reserves in that quantity would cost... Why? It would cost millions of dollars. They would be under the protection of our armed forces. In effect, this means, Admiral Tsutsugu, that if foreign companies are to do business here, that they must build tanks and put in a reserve for the Japanese armed forces. We will, of course, pay for it. If there should ever be need of it. At what price? At a price to be set by us. Set up a reserve at our expense to be requisitioned by you at your price whenever you feel like moving in and taking it. No. No, my company will not agree to that. No, mine. Well, the Americans and the British held out. The Japanese insisted. At last a compromise was worked out. The Mitsubishi interests agreed to supply the storage tanks, which would cost about five million dollars, and lease them to the foreign companies. But this was only part of the Japanese program. Other things were happening at the same time. I went down to the shipyards at Nagasaki. Hello there, Ames. You here too? Yeah. I wanted to get a look at these new tankers. Well, there you are, all ready to be launched. All of them gonna have this design? Approximately. They're built for speed, as well as for carrying capacity. I'll ask this Japanese. Say, what will the speed of these tankers be? About 19 knots of cruising speed. 19 knots? Oh, yeah. Very, very fast. Excuse me, please. Sure. See, Ames? They're building a flock of these fast tankers and building them in mass production. That means that they've got plans. They're gonna get all the oil they can get and get it fast. They're going to bring... Oh, there she goes. Down the ways. Well, Ames, you've seen the launching of one of a fleet of oil tankers that probably will have a lot to do with the history of the next few years. About the time this tanker program was well underway, the Japanese made their next move. Effectives are to run. The tariff on refined oil will be laid. And the tariff on crude oil will be reduced. That meant that the Japanese were going after crude oil. The idea was they'd buy the crude and refine it themselves. But this still left them without enough oil for what they had planned. This new seven-year plan, the synthetic oil production, is another straw in the wind. In the four years between now and 1941, they expect to complete 22 synthetic oil production plants. And in the three years after that, they plan... They got this program going in 1937. And that was the year the Japanese attacked China. And in 1939, after the war broke out in Europe, the British gave the Japanese a little boost. The Japanese had bought some hydrogenation equipment from Germany. And the brass hats in Tokyo asked Britain to allow this hydrogenation equipment to pass through the British blockade around Germany. And the British let them bring it through. And meantime, the United States was exporting oil to Japan. In 1940, a stream of tankers was carrying oil from our Pacific coast ports and our Gulf coast ports. We protest sending oil to Japan to fight the Chinese. The tankers were picketed at the docks. Last year, Japan imported between 30 and 35 million barrels of oil. And 27 million of those barrels came from the United States. And this year, 27 million more barrels of the United States oil will go to Japan. That's why we're picketing. The pickets had the information, all right? Sure, Washington put an embargo on high-pest aviation gas and lube oil. But just the same, Japan imported 2 million barrels a month from the United States. Tankers like this one filled with the gunnels are building up a stockpile of oil for Japan. And what for? To fight the Chinese. Yeah, maybe to fight us too. All right, stand away there. Let's go to the houses. Well, there goes another one. In 1939 and 1940, we shipped about 55 million barrels of oil to Japan. But that wasn't all the oil Japan imported. By no means. She imported about 4 million barrels from the Dutch East Indies. This is the statistician again. She took about 20% of the production of the Indies. Or she could get at the time. But the greatest increase in imports were from Mexico. In 1939, Japan imported 190,000 barrels from Mexico. And in 1940, she imported 750,000 barrels from Mexico. Thank you. Besides this, there was the oil that the Japanese produced within their own empire. It wasn't very much when you think of what she'd need for the plan she had. But it was quite a bit. Wasn't it, Mr. statistician? Indeed it was. She produced 2 million barrels in the island of Formosa and 3,500,000 barrels in the Japanese Confession on the Russian part of the island of Sokaline. Notice that all this came from islands outside Japan. She was using every facility to get oil. In America, the cries were getting louder about selling oil to Japan. Why are we supplying the fuel for the Japanese bombers that are mangling Chinese women and children? We've got to sell oil to Japan to keep it from seizing the Dutch East Indies. That's nothing but appeasement. Don't think that the Japanese will like us any better for backing down to them. If we don't sell oil to the Japanese, the British will. One of these days, they'll be using that oil against us. Would you rather sell to them or have them move in and take the oil of the Dutch East Indies? The Dutch Indies are only about 2,700 miles from Japan. Compared with the west coast of the United States about 9,000 miles away and the Gulf of Mexico nearly 18,000 miles away. But the Japanese at this stage prefer to haul their imports the long distances. They still had their eyes on the oil of the Dutch Indies. The day the Japanese hit Pearl Harbor, they started driving for the oil of the Indies. They knew where the oil was and they knew how to get it. In a matter of weeks, they had taken Tarakhan, the island off the northeast coast of Borneo. Then they took Balikpappan, the big oil refining center in Borneo. They took the oil centers of the Indies first. Then they fanned out and took the rest of the island. Well, Japan's got enough oil now to fight the world. If she can get our wealth back in operation and if she can get the oil to where she needs it. How thoroughly did you Dutch destroy the wealth? Not only the wealth, also the cracking stills and the refineries. The Japanese can repair them, can't they? It would take us who know these wealth or refineries a full year to get them back into production under peacetime conditions. But the Japanese do not have the parts or tools and there's no way for them to get them. The Japanese could improvise to get them back into production, couldn't they? The cracking stills we blew up are as difficult to make as big needle guns. That's the way the talk went. But the Japanese got the oil centers of the Indies back into production in jig time. At last the Japanese had their own source. At the peak of their power, they controlled nearly all the petroleum in the Pacific. Not only the oil in their own home islands and that on the island of Formosa and the oil of Bremer and all that of the Indies, but also that on the Russian part of the island of Sakhalin. All petroleum used by the Allies in the Pacific must be hauled virtually halfway around the world. Oil and gas had to be hauled to Australia. Oil and gas had to be hauled to India and then flown over the hump of the Himalayas into China. In America, we've been using it almost without thinking about the day of reckoning. We've got enough petroleum to supply the whole world. We still have plenty left. We have just so much petroleum and we've been using it faster than any nation on Earth. In our automobiles and trucks, on our farms, in our planes, in our homes and industries. And now we're using it in thousands of tanks and trucks, in thousands of thousands of planes, in our thousands of merchant vessels and Navy ships, besides furnishing gasoline and oil to our lives. In Japan, there was no such use of gas and oil. We rationed our gasoline, but we still had the job of hauling it across the Pacific. But the Japanese had to do a lot of hauling too. And as we sank their ships by the hundreds, they realized as we did that petroleum really is the lifeblood of modern war. With our capture of the Philippines and Okinawa, the Japanese supply line to Borneo and the other oil centers of the Indies has been virtually cut. The Japanese can no longer safely ship the petroleum. You'll remember those reports, but even cutting their supply lines and sinking a lot of their ships was not enough. There was another angle to it. It's not only a matter of depriving the Japanese of the oil in the Indies. We needed ourselves. This was our military point of view. Till now, nearly all the oil in the gasoline used in the Pacific has been hauled out here by our tankers. We've even been supplying the British fleet operating with us. Now, with the war in Europe over, with all the naval units and the air forces being redeployed out here, we're going to be hard put to supply them with our tankers. We've got to have a mirror source of supply. That meant the Indies. The Australian stormed ashore near the oil fields of Balakpapan and soon Paracan was under assault. We wanted that oil. Well, Balakpapan and Paracan fell. And by that time, our B-29s were hammering the refineries that the Japanese had so carefully built back in the 30s. And the Japanese were looking around for other sources. For the purpose of searching for new oil and mineral sources, five new geological survey offices will be opened. All five of the offices were opened within the main islands of Japan. They had written off the oil of the Indies. Now, they had to depend on the oil of Promoza and Sakhalin and any oil they could find in their whole islands. Well, you know what happened. After the war ended, I went on a tour of the Pacific. I had a good look around. That's why I say a lot of things have changed out there, petroleum-wise. There's been a whole new distribution of the oil centers of the Pacific games. Yeah, I've been thinking about that. Promoza's gone back to the British, Promoza's gone back to the Chinese. The Indies, for all practical purposes, have gone back to the Dutch and the British. And the oil of Sakhalin has gone back to the Russians. That gives Russia a source of supply in the Pacific. Not a big one, of course. No, but a source. Yes. With her other sources, she will still be the second largest producer of petroleum in the world. Yes, and she probably hasn't used as much of a petroleum as we've used of ours. She used a lot, but she didn't have to supply her allies in the same amounts as we did. No, the terrific use of our petroleum in this war can never be replaced. It's a casualty. That's what I've been thinking about. I talked to a Russian. Mr. Ames, modern nations cannot live to say nothing of fighting without petroleum. The petroleum of the world belongs to the people. My country has petroleum and your country has petroleum. But some nations do not have petroleum. China and Australia, for example. The peace will depend in a great measure on what is done with this problem of petroleum. But there are many points of view about petroleum. Practical oilmen talk about a realistic view. The only way we're going to keep the peace in the Pacific is to have muscle enough out there to maintain it. That means petroleum. And it means petroleum stored and ready for use on all the bases we have in the Pacific. And other oilmen have other views. We can't replace the petroleum we use in this war. That's gone. That's why we've got to build up reserves and big reserves. We ought to have big stocks underground, tapped and ready. And we ought to buy all the petroleum we can and store it. Besides this, there's the problem of dealing somehow with the nations that don't have petroleum and need it. We've still got oil, but not as much as I'd like to see us have. We're using our supply faster than any other nation. In the interest of peace, we've not only got to have adequate supplies ready to fight, but we've got to help some of the nations that need it so we won't have to fight. Besides that, we've got to see that petroleum is withheld from the nations that make it clear that they're going to use it to make war on others. Yes, it's very interesting that the two nations that produce most of the world's petroleum face each other across the Pacific. This is the story of the part petroleum has played in the Pacific. In the years to come, this black gold bids well to play an increasingly important role in the Pacific. And now we switch to Washington for an interview with Ralph K. Davies, U.S. Deputy Petroleum Administrator for War. With Mr. Davies in the studio is Robert McCormick, Chief of the U.S. Department of Agriculture, is Robert McCormick, Chief of the NBC's Bureau in the Central Pacific during the war. So now, to Washington. This is Robert McCormick. Well, Mr. Davies, that's a dramatic story of how the Japanese prepared for their attack on Pearl Harbor, isn't it? It most certainly is, Mr. McCormick. The Japanese knew that modern warfare depends on armaments, and armaments depend on oil. World War II was, in a real sense, a battle of oil. We produced more oil than the Germans and Japanese, and we won. Well, it certainly took enormous quantities to do it. When I was in the Pacific for NBC, it seemed that every other ship was an oil tanker, and whole islands seemed to be stacked with mountains of oil ground. Enormous is mild in description. When Japan surrendered, the American oil industry was producing oil at the all-time record rate of 205 million gallons a day, every day. No other material was required in such enormous quantities. In terms of bulk, the volume of liquid fuel shipped overseas during the war was nearly 16 times that of food, and almost double that of all other tonnage combined. What do you mean that we shipped almost twice as much oil as we did all the other things combined, all the arms, ammunition, clothing, food, and all those things? Exactly. That's how important oil was in this war, and the reason the Japanese fought so hard to keep those specific oil fields. Well, when you came to Washington back in 1941 to be the Deputy Administrator of the Petroleum Administration for War, you must have felt you had an impossible job, Mr. Davies. Yes, there were moments when it seemed physically impossible to completely fill the war order. That we did completely fill it due to the American oil industry. Every oil man, whether a small independent operator or a member of a large corporation, put his shoulder to the wheel and pushed, and pushed hard. Because all segments of the American oil industry joined forces with the Petroleum Administration for War, it was possible for the team to meet all military demands in full and on time from the beginning of the war to the end. You should be proud of that record, Mr. Davies, because not many industries can make that claim. But from what we hear around Washington, you personally can take a bow for the achievement. And that's probably what was in the mind of William Boyd in his Chicago speech last night, last month, rather. Boyd was speaking as president of the American Petroleum Institute, and he said that the American oil industry, old Ralph Davies, a debtor can never repay. But getting back to the depletion of American oil supplies, what happens now? We're not doing so well in finding the oil fields in this country, are we? No, Mr. McCormick, we are not. And those billions of barrels of oil used during the war have left us with just that much less in the ground. You know we produced during the war one-fifth as much oil as had been produced in the USA over all the years before. Well, will American consumers have to depend more and more on oil from foreign countries? Yes, definitely. We strike another big deposit, such, for example, as was found in East Texas in 1931. Oil is the number one munition, and at the same time, a basically important peacetime product. Well, what about the Anglo-American oil treaty that the Senate Foreign Relations Committee is now considering? I understand you had a lot to do with drafting the treaty. Will it be of much help in getting oil for the United States? Yes, it will. It will help bring order in the international oil trade. Among other things, it will make it possible for American oil operators to explore for oil and to develop their properties on an equal footing with the British. But what about Russia? We hope that the proposed Anglo-American oil treaty will, within a reasonable period of time, be expanded into a multilateral agreement embracing all peaceable nations. I hope and I trust that Russia will be among the signers. And whether in the Pacific or elsewhere, an equal opportunity to engage in peaceful trade in oil will help the world generally, won't it? Yes. Oil is of central importance, not only in war, but in peace as well. That is why the proposed Anglo-American oil treaty holds so much promise for the future. We must see to it that world trade in oil is in a free and orderly manner. And we in the United States must do what we can, both at home and abroad, to assure our oil supplies for the future. Thank you, Ralph K Davies. You've just heard Mr. Davies, the Deputy Petroleum Administrator for war. This is Robert McCormick in Washington and now the Pacific Story sends you back to Hollywood. You have been listening to the Pacific Story presented by the National Broadcasting Company and its affiliated independent stations as a public service to clarify events of the Pacific and to make understandable the crosscurrents of life in the Pacific Basin. For a reprint of this Pacific Story program, send 10 cents in stamps or coin to University of California Press, Berkeley, California. May I repeat? For a reprint of this Pacific Story program, send 10 cents in stamps or coin to University of California Press, Berkeley, California. The Pacific Story is written and directed by Arnold Marquess. The original musical score was composed and conducted by Thomas Peluso. Your principal voice was that of Paul Johnstone. Programs in this series of particular interest to servicemen and women are broadcast overseas to the worldwide facilities of the Armed Forces Radio Service. This program came to you from Hollywood and Washington, D.C. This is the National Broadcasting Company.