There might be a saving in the tanker tonnage now provided by the
pool and in any event no loss since the navy tankers are now trans-
porting less than the quantities allotted to class B.
  Although this proposal is not in conformity with pool principles and
if the plan broke down Chile would of course expect the United States
to come to its aid, the Embassy has been asked by representatives of
the group to submit it and since political and social disturbances would
harmfully effect our war effort, I ask that it be given very careful
consideration.
  It would of course have to be definitely agreed by Chile that if the
plan were accepted no attempt would be made to obtain additional
tankers outside of the pool.
                                                         BowERs

825.6363/274
      Memorandum of Conversation, by Mr. Max Thornburg,
                       Petrolewm Adviser

                                 [WASHINGTON,] November 2, 1942.
  This afternoon Mr. Ynnaes, [Illanes] Commercial Attach6 to the
Chilean Embassy and Colonel Marin, Military Attache to the Chilean
Embassy called at my office to discuss the current oil supply situation
in Chile. Apparently it was their intention to propose the use of the
two Chilean Navy tankers in somewhat the same way that Ambassador
Bowers outlined in his cable number 1840 of October 30. The general
idea seemed to be that the two Navy tankers would be used to supply
a limited category of requirements which they designate as class B,
including supplies for the Army, Navy, Air Force and Air Lines.
According to their proposals these Navy tankers and the requirements
indicated as falling within class B would be removed from the pool,
which would otherwise operate as at present.
  I explained to them that the current requirements for the Army,
Navy and Air Force, as well as all Air Lines, were already in our
"essential" category and, therefore, are fully supplied on the
un-
rationed basis. Consequently, there is no point in the suggestion that
the Navy tankers be assigned to this particular service outside the
pool. I told them further that Mr. Welles and Mr. Bonsal were giv-
ing very close and minute attention to the present oil supply problem
in Chile, and that I have, only today, been instructed to take immedi-
ate steps to deal with that situation in some effective way. I added
that one such step that had been decided upon is to send Mr. Nuland,
Executive Secretary of the Foreign Petroleum Policy Committee to
Santiago at once to make particular examination of the oil require-



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