825.6363/274: Telegram

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

1840. A very acute situation is developing as a result of curtailment of petroleum supplies and information from various friendly and reliable sources indicates that extremely serious political and social disturbances may develop. Obviously our enemies are effectively exploiting the general discontent and have been successful in creating the belief on the part of large numbers that the United States is trying to force Chile’s hand by withholding petroleum supplies.

The trade associations and labor unions, whose members are dependent on the continued operation of motor vehicles and motor driven equipment, have united in an appeal to President Ríos for immediate and effective action and have tentatively proposed as a solution that Chile utilize its two small navy tankers exclusively to supply class B rationed consumption, leaving class A to be supplied by the pool. They claim that since Chile would then herself be responsible for transporting supplies for class B consumption it would effectively silence the charge of pressure by the United States. They firmly believe that public opinion will force the navy to utilize their tankers, which today are operating far under capacity, with much greater efficiency once it is generally known they alone are responsible for supplying class B needs. Including in category B the consumption of the Chilean navy and armed forces and the national air line as well as Panagra,70 which are supplied today under A, we estimate that if the Chilean navy tankers operate with 100% efficiency they could supply for class B 50% of 1941 consumption instead of 40%.

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There might be a saving in the tanker tonnage now provided by the pool and in any event no loss since the navy tankers are now transporting less than the quantities allotted to class B.

Although this proposal is not in conformity with pool principles and if the plan broke down Chile would of course expect the United States to come to its aid, the Embassy has been asked by representatives of the group to submit it and since political and social disturbances would harmfully effect our war effort, I ask that it be given very careful consideration.

It would of course have to be definitely agreed by Chile that if the plan were accepted no attempt would be made to obtain additional tankers outside of the pool.

  1. Pan American-Grace Airways.