825.6363/281: Telegram
The Ambassador in Chile (Bowers) to the Secretary of State
[Received November 18—2:50 a.m.]
2004. For Thornburg from Nuland. Reference your memorandum of conversation dated November 2 with Colonel Marin and Marionynnaes [Mario Illanes]. Preliminary discussions held today indicate Chile’s desire to receive supplies of fuel oil and diesel oil approximately equal to their 1941 consumption. Their estimate of gasoline consumption for November and December indicates a cut of approximately 6% from a similar period in 1941. The foregoing refers to category B only as there is no question about A essentials.
It is apparent that in their mind is the use of their tankers and any other tankers which they may secure including a possible one from Sweden and a possible one from Argentina which would supply their B essentials at practically 100% of their 1941 consumption. It was pointed out to them that if they desired to leave the pool then they would also have to supply 40% of their A essentials which are now supplied with pool tonnage and they correctly stated that they could not do this even with the addition of a Swedish and Argentine tanker. On the other hand, if we would supply their war essentials from the pool tanker tonnage they could then take care of their ordering supplies with their boats.
I have taken the line that it is undesirable for them to withdraw from the pool with which they have apparently agreed but their ideas of requirements are so far above what they would get on the pool basis that no satisfactory agreement seems even likely. However, we might trade them into a position where they would undertake to supply such a quantity for themselves as would require them to secure an Argentine or a Swedish tanker. The latter may be possible by their trading a transport allegedly now in Sweden for a tanker.
[Page 120]To me this is a breakdown of the pool but it must be admitted that there is not now much incentive for any pool member to go out and attempt to secure additional tonnage. You might wish to consider revising general pool principles to the extent of allowing any member that provides additional tanker tonnage to secure 50% of the vessel’s capacity for its own essential use in excess of the formula. Personally I would prefer to see the pool maintained and this country granted consideration by essentials subcommittee for certain additional requirements despite the unhappiness it will create although you will understand that nothing we can do on the basis of existing principles will satisfy their present demands.
Will you please indicate whether you desire to negotiate towards their leaving the pool on the most advantageous terms possible to us or continue them in the pool with the maximum of generosity possible within existing principles. [Nuland.]