825.6363/338: Airgram

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

A–928. Your despatch no. 6547 of May 20, 194375 and telegram no. 1069, June 12, 4 p.m. The Essentials Requirements Committee has considered your despatch under reference and is of the opinion that, in addition to the quantities now listed as essential (361,700 barrels according to figures from the Petroleum Supply Committee for Latin America, which figures are in the possession of the Chilean Food Committee), approximately 148,000 barrels of diesel oil for the year should be made available to Chile on a war essential basis. This amount covers the requirements of the four Northern provinces (1,825,430 liters per month as per table no. 7, your despatch no. 6547) and 11 percent of the agricultural requirements (132,554 liters per month as per table [Page 877] no. 7). Subject to correction by you, it is thought that some of the mining requirements listed in table no. 1 “Class A—Controlled by D.P.S.” may already be carried as essential by the Petroleum Supply Committee for Latin America, in their “Estimated Requirements 1943”, dated May 11, 1943, under the heading “Other Copper” and “Manganese”. In any event any war essential mining supplies should be so carried. On the same record army, navy, and ships’ bunkers are also carried as essentials.

It would seem therefore that the 78,800 barrels available for national uses (PSCLA76 figures) could be used entirely for public services and industry and for those requirements of agriculture remaining after the four northern provinces’ requirements and 11 percent of total agricultural requirements have been met from the additional allotment of 148,000 barrels. It is thus obvious that for the total diesel requirements of Chile, other than those specifically placed on an essential basis, there will only be available approximately 1,000,000 liters per month, thus necessitating a reduction in consumption in line with that of other countries participating in the pool.

Of course, if the Chilean Government desires it can further increase the amount of diesel oil available by taking within the limits of the total allotment, aside from quantities specified for essential uses, more diesel oil and less of some other product, such as gasoline. Aside from the large amounts made available for essentials, there is a total of 577,600 barrels of all petroleum products scheduled to be supplied to Chile. It is felt that within this amount it should be possible to curtail consumption of products other than diesel oil to such an extent that the diesel oil, which could be substituted on an equivalent quantity basis for the other products saved, in addition to the above-mentioned allotment of 148,000 barrels, which has now been made, should be sufficient to care for a carefully rationed diesel oil consumption.

From figures furnished by the Petroleum Supply Committee for Latin America it seems apparent that a considerable quantity of gasoline made available for essential uses has been diverted to nonessential uses. While there may be an error in these figures, those given by you on motor car operation indicate that Chile does not yet fully appreciate the seriousness of the supply situation. The fact that the records of the Petroleum Supply Committee for Latin America show that actual consumption in Chile for essential requirements for the first four months of 1943 was less than the estimated consumption, does not justify the diversion of supplies to nonessential uses. Moreover, Chile should fully appreciate the advantage to it of the accumulation, when possible, of reserves in anticipation of seasonal [Page 878] or other demands, and, in its own interest, should fully cooperate in the maintenance of those reserves for their proper uses rather than permitting them to be diverted to nonessential purposes. Since the supply of petroleum is subject to the exigencies of war, the danger of running out of stock when there is a particular need and without adequate means of replenishing it, should be kept clearly in mind by the Chilean authorities. After due consideration is given to seasonal fluctuations, the estimates for essential uses will be reduced so that they will be more nearly in line with necessary consumption.

If Chile would reduce the number of cars on the road, some tanker tonnage would be available for diesel. In this connection, as you are aware, there is now no pleasure driving permitted in the eastern United States where supplies have been affected by the shortage of tanker tonnage. Additional tonnage would also be saved for diesel oil if such things as the following were to be done: (1) the operations of less essential industry curtailed; (2) a portion of fuel oil consumption converted to other types of fuels (if possible, coal should be secured from Australia and Chile’s own production should be increased); and (3) a reduction in the consumption of electricity by such measures as the elimination of electric signs, etc.

The Nuland formula77 was devised to meet the special circumstances existing in Chile in November 1942 and is not to be taken as a precedent for deviation from the fundamental pool formula of a quota, at present 40 percent of 1941 consumption, plus war essentials and such additional amounts as may be proved to be absolutely necessary to prevent serious economic dislocation and which can be supplied by available transportation facilities. On the basis of the existing serious tanker situation, it is simply not possible to meet the Chileans’ desire that Chile be supplied with sufficient petroleum to care for the normal requirements of industry, agriculture, and public services.

We have explained the views of the Essentials Requirements Committee to Casanueva and Illanes, Commercial Attaché here, and assume that Martinez will discuss this matter with you, after which you may wish to make further recommendations to the Department before communicating the Committee’s conclusion to the Chilean officials. If after further discussions you still feel that Martinez should visit the United States, the Department will consider the suggestion.

It is assumed that the figures of the Petroleum Supply Committee for Latin America, quoted herein, are available to you from the Chilean pool committee.

  1. Not printed.
  2. Petroleum Supply Committee for Latin America.
  3. For a statement of this formula, see telegram No. 2032, November 21, 1942, from the Ambassador in Chile, Foreign Relations, 1942, vol. vi, p. 120.