Commander Paul Foley and L. I. Thomas, to Edward N. Hurley, Chairman, United States Shipping Board, and Mark L. Requa, general Director, Oil Division, U.S. Fuel Administration
Cablegram Sent August 15, 1918. AJL
To Opnav Washington Serial No. 2965
Prep. By LIT & PF C-3 LCT D.R.
2965 Petroleum Mission No. 32 from Foley and Thomas for Hurley and Requa. Strictly confidential.
Paragraph 1. After several conferences on rerouting questions we have gained the distinct impression that Authorities seem inclined to consider that shipments of naptha from Eastern sources to Mediterranean as separate and distinct from adjustment of kerosene position in Eastern areas as outlined in your telegram No. 12.
Paragraph 2. We have made it perfectly plain that it is our understanding the two points cannot be treated separately and that one is absolutely conditional upon the other. When you answer our cable No. 31 we consider it very desirable that you should develop and emphasize this feature.
Paragraph 3. If adjustment is made on a financial basis we anticipate that Authorities, acting on Cohen’s advise, may urge that kerosene drawn by American interests from Eastern sources for India and South China should bear freight rate on basis of mileage from San Francisco to North China. This would be, in effect, an exchange of products except that such shipments would be carefully adjusted on a financial basis.
Paragraph 4. Cohen has informed Authorities Eastern kerosene should command a higher price than American kerosene arguing that present freight rates on casing and drilling material from America to East is responsible for this. We maintain this is effect by cheap labour. Governmental and transportational support and enhanced profits on naptha, fuel oil and residual products the prices for which unlike America are not controlled.
Paragraph 5. We think it wouldbe well to point out in your cable to us that whereas British oil interests have been protected in European markets now disadvantageously located in relation to Eastern sources of supply that such markets are supplied from America on equal terms to American interests. This is notably true in Great Britain where deliveries are made under the Pool Board. 140715 2965.
Source Note: Cy, DNA, RG 45, Entry 517B.