825.85/172: Telegram

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

496. Your 841, May 6. Representatives of CSAV and WSA have discussed the matter of postwar replacement of the Chilean motorships on a strictly informal and preliminary basis and the WSA representatives have represented clearly that until approval of the Department and the War Shipping Administrator, nothing was final. During the course of the discussions various suggestions were made and the Department has been informed concerning them. As WSA lacks statutory authority to make a commitment concerning the sale of vessels to foreign buyers Subercaseaux and WSA representatives agreed informally, subject to approval by higher authorities, that a settlement of the replacement question would be effected by an agreement between the governments along the following lines:

Either directly or through the Chilean Government, opportunity will be afforded the CSAV to contract with an American shipyard for the construction of vessels of gross tonnage equivalent to the tonnage of the three vessels to be sold to the United States, to purchase such vessels privately, or to purchase them from the United States if this Government has such vessels for sale. The opportunity to acquire these vessels would be at the expense and selection of the CSAV at any time after the conclusion of hostilities. In the same manner the right to acquire vessels of the same class which any other line may acquire in the U. S. would be given the CSAV.

With respect to passenger vessel competition during the war Subercaseaux asked for additional assurance at the last meeting. With reference to the extent to which a postwar commitment is possible, WSA has excellent reasons for believing that Vial has been kept fully informed, and that the proposal, the substance of which is given above, was on April 27, repeated to him in a telephone conversation.

The WSA is very much concerned over the matter of speed, as indicated in the Department’s 469.67 With the view to determining the condition of the Copiapo, which is now in New Orleans, and its [Page 871] ability to maintain 15 knots speed, the vessel has been inspected both by WSA and Army representatives. On the current voyage of the vessel an examination of the log indicates that at 103 revolutions the vessel maintained a speed of 14 knots for 20 days. In order to avoid strain on the machinery in view of scarcity of parts, Subercaseaux explained, the vessel has been run at a lower speed and he insists that it is capable of maintaining, under normal conditions, a sea speed of 15½ to 16½ knots. WSA doubts this statement. Subercaseaux has been informed that until the Army determines whether it wants the vessels no final offer can be submitted. For Army Transport Service the speed factor is critical. The Army’s decision is expected shortly. WSA appreciates your suggestion that a fair offer on a take it or leave it basis be made and that public announcement of what has been done be made. As a matter of fact WSA have planned to make such an offer and will issue a statement such as you have suggested, if the Army wants the vessels.

  1. Dated May 3, 7 p.m., p. 866.