Commander Paul Foley and L. I. Thomas to Edward N. Hurley, Chairman, United States Shipping Board
Chronological Copy. File No. <46-4-1>
Cablegram Sent July 4 1918. EJW
To Opnav, Washington. Serial No. 543.
Prep. by C-3 SX D.R.
543. Petroleum Mission 18 from Foley and Thomas for Hurley. Allied Maritime Transport council have requested Inter-Allied Petroleum Conference to submit with least possible delay a return showing stocks, requirements, reserves, source of origin and estimate of tonnage required to meet Allied petroleum requirements during 1918. Object of above is to balance tonnage against import programmes it being obvious insufficient tonnage exists or building to maintain present programmes necessitating scrutiny and revision to bring imports into line with tonnage available. Tank tonnage is interlocked with general tonnage situation on account of shipping considerable quantities of fuel oil in double bottoms of cargo steamers. Inter-Allied Petroleum Conference observes it is impossible to intelligently prepare above return until Eastern re-routing proposals are definitely agreed and settled. We concur. In connection with above see our telegram No. 5, our letter No. 70 with enclosures, also paragraphs 91 to 102 of minutes of Conference held in Paris May 6th and 7th enclosed with our letter No. 84. British Government still maintain that on moral, political and financial grounds they cannot adopt any policy which contemplates the destruction of naphtha at Eastern refineries. Their present programme is as follows:
1. Shipment of 130,000 tons Toluol Benzine
Borneo to U.K., and France.
2. Shipment of 36,000 tons Aviation Naphtha
Sumatra to U.K.,
3. Balance of Eastern Naphtha, after absorbing as much as possible into fuel oil and kerosene, to be shipped to Egypt and Mediterranean.
As regards the Eastern petroleum trade while they consider volume for the various Eastern countries should be tentatively based on 1917 consumption they are willing to apply policy of nearest source of supply by East supplying East as far as possible and undertake, subject to agreement by our Government, to arrange for allocation of the Eastern trade on a percentage basis namely; The interested American and British marketing Companies to receive, irrespective of volume and source of supply, the percentage of trade held by each interest in the respective Eastern areas during the year 1913.
Such adjustments as may be necessary to be made on a fair and equitable basis. The year 1913 has been selected as it is the last year preceding the war when the activities of the interested Companies were not impeded by transportational and other difficulties arising from the requisition of ships. As previously indicated it is at present impossible to prepare agreed programme and ac[c]urately balance tonnage against requirements. It would therefore seem imperative, as a war measure, that some understanding be reached with the least possible delay. Fear policy outlined in your telegram No. 49 would result in wastage of tonnage as in view of stand taken by British Government naphtha which under re-routing scheme is ear-marked for the Mediterranean would be shipped to U.K.
Request prompt telegraphic advices if our Government are prepared to indorse British proposals. Taking everything into consideration we are of opinion they afford basis for most satisfactory solution of the problem and we recommend acceptance. 23004, 543.
Source Note: Cy, DNA, RG 45, Entry 517B. The second page is done on a “Chronological Copy” form so some of the heading, which is printed on the form, is repeated. There is also a “Page Two.” preceding the text.