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

1643. Chilean Government has just chartered Argentine tanker Juncal believed to be en route to the United States with vegetable oil for Commodity Credit Corporation, for single trip from West Coast United States to Chile with 10 million liters gasoline. This gasoline is ostensibly to increase reserves of Ministry for Defense but when asked whether it would be counted as delivery by pool answer was evasive and there will be nothing to prevent its use for civilian consumption.

Embassy is also informed that Ministry of Defense has contracted to buy outside of the pool 10,000 barrels of aviation gasoline in steel drums to be delivered within 90 days probably at San Pedro.

Both transactions will result in considerably higher cost than pool deliveries and Embassy considers them extremely questionable. Local Standard subsidiary has informed headquarters and recommended that the Department investigate immediately.