825.6363/282: Telegram
The Ambassador in Chile (Bowers) to the Secretary of State
[Received November 22—7 a.m.]
2032. For Thornburg from Nuland. After meeting with local pool committee, two members of which are also members of the Petroleum [Page 121] Commission and following further meetings with the Commission and the Director of Petroleum Rationing71 all thoughts of Chile’s leaving the pool seem to have been abandoned and a better understanding of the realities of the pool’s operations seems apparent.
In this improved atmosphere it has been possible to maintain the basic pool principle of 40% of 1941 civilian requirements plus essentials. We have agreed to recommend the following categories and estimated monthly quantities in barrels per month: local military 3200; all air lines 170; Anaconda 380; Braden 80; manganese mines 108; nitrate mines 1250; iron mines 50; other copper mines 931; mineral trucking 7530; mineral railways 50; mineral agriculture 1650; mineral labor transportation 2630.
This list includes and supersedes all former lists of essentials including those now being used by the pool committee.
These figures have been arrived at by using the rationing authorities estimates which were arrived at by multiplying the number of motor vehicles engaged in the various operations by the rationed quantity of gasoline for each of the various categories and it is considered that the quantities to which they propose to ration are reasonable.
In addition it is recommended that Chile be allowed as essential 13,290 barrels of gasoline per month for December, January, February and March only for urgent agricultural needs.
It is agreed that essentials will be supplied only to the industries listed and that supplies are not merely being made available to Chile’s general economy.
All changes in “A” essentials will only be made after submission to this Embassy and subject to the established procedure for the creation of essential categories. Chile’s diesel oil, fuel oil and kerosene estimated requirements are admitted by the Commission to be so far out of line that they cannot even be considered without careful review which will take some time. Once this is done a request will be made to the Embassy to establish certain categories of essentials in accordance with the approved formula.
In the meantime it has been repeatedly emphasized that they will only be supplied diesel and furnace oil on a 40 percent basis and continued consumption at present rates will result in a stock shortage.
Chile will make available to the pool the full and improved use of her two tankers and such deep tank and double bottom supplies as she can arrange. Also any additional tonnage she can secure such as the Juncal.
Chile will also attempt to secure Swedish or other tankers as we may indicate, provided the United States Government will reimburse [Page 122] Chile for any cost in excess of pool rates. Chile will also consider enlarging her present coal output, reducing her present consumption or purchasing coal from Australia to be delivered by War Shipping Administration ships now allegedly running empty from Australia to Chilean ports. We should develop this possibility in Washington and advise the Embassy here as to what can be done. Such additional coal could be used as a substitute for fuel oil, thus reducing Chile’s tanker tonnage requirements. There was no question raised regarding military reserve stocks nor of the 10,000 barrels of aviation gasoline.
I fear that it cannot be said that they are fully satisfied but they are at least willing to go along for the time being on the present basis. If the formula submitted herein is approved the figures can be supplied the essentials subcommittee with the full recommendations of this Embassy and the pool committee. It is anticipated that approval will date from November 1 and that this Embassy and the local pool committee will be notified as soon as possible so that appropriate stocks may be made available.
This formula will result in total supplies to Chile of approximately 10,000,000 liters per month for the four months December, January, February and March and 7,500,000 liters thereafter. This is something less than was considered necessary in Buenos Aires despatch number 6292 dated August 26, 194272 and is a considerable reduction from the request of the Chilean Government for a minimum of 14,000,000 liters per month.
If constant pressure can be maintained on the Chilean Government it may be able to supply sufficient tonnage to take care of a part of the proposed increase.
You appreciate that what we have done is to rearrange the classification between essentials and nonessentials.
The proposed formula has the following advantages: (1) It has driven home and gained respect for the fundamental pool principles. (2) It should accelerate the rationing activities of the Chilean Government. (3) It will maintain pool principles of distribution. (4) It has reduced the Chileans previous estimates of their minimum requirements and supplies to considerably less than they considered absolutely necessary. (5) It causes additional agricultural supplies to expire at the end of four months, thus paving the way for further reductions. (6) It provides an incentive for Chile to secure outside tonnage since they now appreciate that of the essentials supplied the southern division of the pool by pool tankage Chile receives over [Page 123] 66⅔% although their contribution to the pool to date has been only two poorly operated small tankers.
It is proposed that the Chilean authorities will now formally present their request for special consideration for gasoline requirements to the Embassy and these will be forwarded to you in the usual manner. Later diesel and fuel oil will be formally presented as will all requests for change in the quantities or categories deemed essential.
Meanwhile it is suggested that this telegram be considered advance notice of the formal gasoline request so that it may be dealt with immediately and I am assuming that for political reasons and on the instructions of the Department these recommendations will be immediately approved by the essentials subcommittee.
As there is nothing further that I can do here Mr. Clover and I expect to depart for Buenos Aires on Sunday the 22nd and Mr. Merritt,73 whose assistance has been invaluable, will return to Bogotá on the same date. [Nuland.]