Office of the Historian

File No. 825.6374/314

The Chilean Embassy to the Department of State

Memorandum

In 1915 with previous authorization by the British Government and, apparently, with the previous knowledge of the United States, the firm of Sloman & Company and Messrs. Gildemeister & Company entered into a contract relating to the supplying of petroleum.

Messrs. Williamson, Balfour & Company, agents of the vendors having failed to deliver the petroleum to Messrs. Gildemeister & Company, the latter appeared to file suit some eight months ago before the Court of Valparaiso to enforce the delivery of the petroleum, and in spite of having offered and expected a settlement such has not been accomplished and they were, a month ago, obliged to petition for an attachment covering 16,000 tons. This attachment was made effective only as to 10,500 tons, lying in warehouses.

This procedure is in accordance with the Chilean Constitution and laws and the Government is perforce required to lend the aid of its public powers as called upon by the judicial authority, in accordance with the terms of a positive provision of the organic law covering judicial power. It has been said that the Government of the United States has forbidden the exportation of petroleum to Chile and ordered vessels en route to return.

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The Government of the United States should take into consideration the difficulties which will develop for the nitrate industries and the state finances of Chile. If it would be convenient approach the Department of State and lay before it the foregoing facts and ask the Department to interpose its good offices for the settlement of the difficulties indicated.

To this end the Government proposes to delay the delivery of the petroleum to the German firms indicated until after the termination of the war, when 50 per cent of the quantity mentioned should be delivered in compensation. It would be an advantage if the Government of the United States would intervene to bring about the acceptance of this proposition which was sometime ago submitted to the vendors.

Washington , undated.
[Received July 18, 1918.]