825.6363/257: Telegram

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

1465. To Secretary and Under Secretary. Department’s circular telegram, September 9, 9 p.m. In my airgram 91, August 25, 5:50 p.m., I reported with all possible emphasis that only overwhelming necessity could justify reduction petroleum deliveries to Chile at this time to such an extent as absolutely to disrupt the country’s economy. I recommend that deliveries for other than war essential uses be at the rate of 60% of 1941 consumption. Your own petroleum expert, Mr. Clover, after a very careful study on the ground, concluded that a reduction below 60% would have disastrous effects on country’s economy. We are firmly convinced that to reduce to 40% would have major economic consequences that would most gravely compromise any progress we are making with difficult political negotiations and give our enemies ammunition that would be used with deadly effect against us.

With all possible emphasis, therefore, I urge that no change be made in present delivery schedule, at least until after the President’s visit, and that instead of advising Chilean Government that a further reduction has been made I merely inform them that the increase asked is impossible and warn that further reductions may be necessary. [Page 111] Even this will be a very hard blow since consumption is still far above the 50% level and stocks, particularly motor gasoline and kerosene, are small. I shall take no action until you have reconsidered the matter and I receive further instructions.

Just at this critical juncture with lines closely drawn here, we are already creating the impression of bringing pressure in the case of nitrate and copper and it certainly seems unwise to me knowingly to strike a disastrous blow at Chile’s economy that may easily turn public opinion bitterly against us in the midst of difficult negotiations that are making progress. I am so positive that I am correct that I cannot assume the responsibility without again making clear to the Department the dangerous political reactions that would follow the disruption of Chilean economy.