File No. 812.516/114a

The Secretary of State to Mr. Arredondo, representing American interests


198. You are instructed to say to the Minister of Finance that this Government views with grave concern the reported plans of the de facto Government to take drastic action against the banking institutions of Mexico, corporations which represent the very nerves of economic Mexico. It is only natural that, following a long and devastating revolution, the affairs of all business concerns should be in a rather disorganized condition. Banks are no exception to this rule. On the contrary, they are more susceptible to political changes and more likely to be deeply affected thereby than any other business enterprise.

If drastic action is to be employed against the banks, without allowing ample time to recover their equilibrium, this Government fears that chaos will result in Mexico; that the good will of the foreign governments whose subjects are interested will, in a great measure, be alienated; and that the doors of financial institutions the world over will be closed to all propositions emanating from Mexico: thus making the rehabilitation of that country one of extreme difficulty, if not altogether impossible.