825.6363/253: Airgram

The Ambassador in Chile (Bowers) to the Secretary of State

A–91. In accordance with his latest intimation from the Department that 40% of the 1941 petroleum consumption might be the total available for normal internal consumption in Chile, a study was prepared by Mr. Clover59 from all available data to show the effect upon Chile’s internal economy. It is the Embassy’s recommendation that the 40% basis be modified to the extent of an additional 153,000 barrels every 6 months, say 2 cargoes. Total rationed consumption in any 6 months’ period would thus be scheduled as 488,000 barrels.

It is expected this quantity would permit the functioning of essential public services, motor truck and bus transport at an existence level, and such taxis and essential private cars as may be necessary, but would eliminate pleasure driving. The Embassy considers that further [Page 109] reductions are not feasible, except on the basis that lack of tankers precludes the possibility of giving consideration to the effect upon Chile of any further reduction in petroleum supplies.

This basis and the inevitability of it have been explained to the Chilean authorities. As soon as the Department telegraphs what quantity may be expected it is anticipated that Chile will issue rationing orders in conformity with the visible supplies.

The Embassy once more repeated to the authorities that any chartering of tankers by Chile would not help their situation unless they secured a fleet capable of bringing in more than the total quantity planned for Chile by the Pool. Lesser capacity would help the Pool, not Chile.

For over-all political reasons the Embassy very strongly recommends that the Department accept by telegram this estimate as the minimum to be supplied for Chile’s normal requirements. The comparatively small extra quantity is considered to be a negligible price to pay for a gesture considered by the Chilean authorities to be a realistic cooperation with their very pressing difficulties. At this stage of our political negotiations only overwhelming necessity could justify forcing normal local petroleum consumption below what is considered by the governmental authorities and the Embassy to be the lowest subsistence level.

The Embassy’s recommendation is based upon the following study:

Recommended petroleum allotment for a 6 months’ period, on basis of cutting supplies to lowest figure short of a basic disruption of Chile’s internal economy.

[Here follows statistical table.]

The normal consumption for non war-essential use in 1941 (July–December) was 23.7% of Chile’s total consumption. In common with the other petroleum importing South American Republics, it is understood that Chile will be asked to cut her consumption to 40% of the 1941 figure.

A basic study of the effects of such a cut indicates that a minimum of 13.8% of the 1941 consumption (instead of the normal 23.7%) is required for the functioning of the internal economy, even on a very reduced basis. This increase over the 40% amounts to 153,000 barrels, or 2 extra tankers in 6 months.

It is considered that the above appraisal of the minimum quantities for Chile is applicable to any 6 months’ period, and not just for the last 6 months of 1942, because seasonal variations have been eliminated.

Supporting data covering each product will be detailed in Mr. Clover’s report to the Petroleum Adviser.

  1. Philip Clover, Petroleum Attaché at Buenos Aires, whose jurisdiction included Chile.