825.6363/274
Memorandum of Conversation, by Mr. Max Thornburg, Petroleum Adviser
This afternoon Mr. Ynnaes, [Illanes] Commercial Attaché to the Chilean Embassy and Colonel Marin, Military Attaché to the Chilean Embassy called at my office to discuss the current oil supply situation in Chile. Apparently it was their intention to propose the use of the two Chilean Navy tankers in somewhat the same way that Ambassador Bowers outlined in his cable number 1840 of October 30. The general idea seemed to be that the two Navy tankers would be used to supply a limited category of requirements which they designate as class B, including supplies for the Army, Navy, Air Force and Air Lines. According to their proposals these Navy tankers and the requirements indicated as falling within class B would be removed from the pool, which would otherwise operate as at present.
I explained to them that the current requirements for the Army, Navy and Air Force, as well as all Air Lines, were already in our “essential” category and, therefore, are fully supplied on the unrationed basis. Consequently, there is no point in the suggestion that the Navy tankers be assigned to this particular service outside the pool. I told them further that Mr. Welles and Mr. Bonsal were giving very close and minute attention to the present oil supply problem in Chile, and that I have, only today, been instructed to take immediate steps to deal with that situation in some effective way. I added that one such step that had been decided upon is to send Mr. Nuland, Executive Secretary of the Foreign Petroleum Policy Committee to Santiago at once to make particular examination of the oil requirements [Page 118] which should be classified as “essential”, and, therefore, removed from the rationed category.
I took occasion to point out to them that according to our information from Mr. Bowers, the two Chilean Navy tankers are at present working “far below capacity”. I said that our Ambassador obviously could not be expected to know this except by report and that, consequently, he might be in error, but that if it proved to be true, it must be looked upon as a shocking disregard of our pool principles. Mr. Ynnaes [Illanes] and Colonel Marin both appeared astonished at this report and promised to look into it. They seemed completely satisfied with the present plan of having Mr. Nuland visit Santiago and agreed that the principles which I described, and which they discussed in some detail to make sure they understood, were sound.
For the record, these principles were as follows:
- 1.
- That the Chilean Navy tankers are considered as being part of the pool tanker tonnage, although remaining completely under the Chilean authority as far as actual operation is concerned.
- 2.
- Military supplies of oil will be furnished on a basis of current requirements, allowing a normal inventory of, say, two months.
- 3.
- All requirements classified as “essential”, whether on a basis of war importance or essentiality for national reasons, will be supplied fully by the pool in amounts determined by the committees which have already been established for this purpose.
- 4.
- If Mr. Nuland, in collaboration with the national pool committee in Santiago and such other agencies of the Government as are designated, find that certain oil requirements now in the forty percent rationed category should be reclassified in the “essential” category, supplies will be rescheduled immediately. The rationed category, however, will remain at forty percent or whatever level is currently in effect.