825.6363/7–544
The Ambassador in Chile (Bowers) to the Secretary of State
[Received July 20.]
The Ambassador has the honor to enclose a report on the gasoline situation71 made by Señor Fernando Moller, Minister of Economy and Commerce, to the Chilean Congress at its request. It is believed that Señor Moller rendered a fair exposition of the problem from the standpoint of the United States, considering the various pressures to which he has been subjected for increased quantities of gasoline. However, he both admits and fails to explain the failure of rationing to preserve reserves for unforeseen contingencies from deliveries to Chile in excess of pool formula consumption. The only explanation of over-consumption is stated to be the inadequacy of Chile’s quota to meet her prime necessities.
It should be noted that he refers to the continued efforts by his government to obtain a larger quota more commensurate with consumption for what are claimed to be essentials, although he appears not too sanguine of the outcome; also that he recognizes the double problem of both supply and transport as stressed by the Embassy under instructions from the Department; that by his reference to acquisition of gasoline outside the pool source of supply, he appears reconciled to the fact that the proposed deal for the purchase of gasoline from Peru is dead.
The Embassy had hoped to obtain real assurances and cooperation against future over-consumption and reserve depletion as instructed in the Department’s telegrams no. 656 of June 5, 1944 and no. 704 of June 16, 1944 and had received informal promises that these assurances would be forthcoming. It now appears unlikely that the government will wish to make formal commitments to this effect at this time as the immediate problem of supply was solved by information received from the Chilean Embassy in Washington as a result of its discussions there. This month there is now in effect the strictest rationing yet, initiated perforce by an eighteen day delay of the sailing of the Chilean Navy tanker Maipo and several breakdowns of the tanker Don Pancho en route to Valparaiso. Prior to the arrival of the Maipo, expected July 21, in all probability all bulk storage facilities and even gasoline stations will be dry, and some time will be required after that date for distribution of arriving product.
It would be highly desirable if Chile’s quota could be recast on a basis that could be made to endure. The government is now preparing a study toward this end in connection with the forward requirements estimate requested in the Department’s circular airgram of May 19, [Page 752] 1944.72 Unless upward revision of quota can be justified and granted with concomitant assurances by the Chilean Government that consumption will be maintained at the determined level, it would be unwise to expect that large shipments via the tanker Virginia will be in part held in reserve for future consumption as suggested in the Department’s telegram no. 704 of June 16, 1944.
Inasmuch as Chile from the inception of the petroleum pool has consistently consumed more than formula maintaining that it is impossible to do otherwise, and each time supplies have been exhausted appeals have successfully brought assistance, a pattern has been established that is somewhat difficult to alter. The alternatives to recasting the quota on the basis outlined are to limit current shipments to the formula consumption level with the full expectancy of continued crises and appeals for help, or to retain title in some agency of the United States Government to excess deliveries, which treatment as an improvident spendthrift would most certainly be unpalatable to the Chilean Government.