825.6363/258: Telegram

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

1477. For Under Secretary. I am sending this to you because of its vital effect on present political negotiations.

Department’s circular September 9, 9 p.m. and number 1039, September 11, 9 p.m.

Chilean Government has been informed of the further reduction in petroleum supplies for other than war essential uses of 40% 1941 consumption.

Although your telegrams indicate that this reduction is only effective now the Chilean Pool Committee has information that it is retroactive from August 1. If the latter is correct Chile will soon find herself completely without petroleum and while I cannot defend her shortsightedness in not having adjusted consumption to our delivery schedule such a situation simply cannot be permitted to arise.

The following figures, expressed in thousands of liters, make this danger clear: Pool Committee New York will calculate that on 40% basis Chile is entitled deliveries at rate of only 6375 gasoline and 563 kerosene per month as from August 1st and that in view of supplies already received since that date no further deliveries should be made for a considerable period. September rationing is still on basis of 9700 gasoline and 1180 kerosene and August consumption was considerably higher which means that in 2 months Chile will have used up nearly twice as much as will be replaced and therefore that her approximate stocks of 22600 gasoline and 2300 kerosene on September 1st will be rapidly exhausted. Specific data are not available for black products but a similar situation is known to exist.

If transportation facilities, light, power should all be cut off, and this will result if replacements of petroleum supplies to Chile should be placed on the 40% basis as from August 1, the reaction on public opinion here would be tremendous and largely counteract all we have recently gained on the main issue of breaking relations. I cannot urge too strongly therefore that the effective date of the new reduction be postponed until October 1st when a decree prohibiting the use of private cars except when specially authorized goes into force or at least that the reduction not be made effective until September 12th, the date on which the Chilean Government was first given notice. Please telegraph instructions on this point urgently.

With reference to the Department’s circular telegram September 3, 10 p.m.,63 regarding the classification of certain operations as war [Page 113] essential and therefore entitled to receive their full petroleum requirements it is the Embassy’s understanding that such classification has already been granted at Washington to the principal mines and the railroads transporting strategic materials and that in those cases no action is necessary here. Please confirm this by telegram giving a complete list of the approved companies. It will be assumed that all consumers not on this list including the Chilean Army and Navy will have to submit applications through the appropriate local agency for transmittal by the Embassy to Washington.

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