The Secretary of State to the Ambassador in Mexico ( Fletcher)
[Telegram]
Washington,
March 15, 1918, 8 p.m.
883. Your 828, March 8, 10 p.m. [a.m.] and 831, March 8, 1 p.m. The Department appreciates the disappointment you undoubtedly feel on account of the failure of ratification by Carranza of the negotiations carried on by you with Bonillas and Nieto in Washington. The attitude of Carranza is no doubt in part explained by reference to your 8381 and Department’s 7991 and 848.1
The Department believes that the attitude of the United States Government towards the renewal of these negotiations as suggested in the note of Mexican Minister for Foreign Affairs should be governed by the following considerations:
- (1)
- The present situation is such that Department wishes you to remain in Mexico.
- (2)
- Conference has been held with representatives of Federal
Reserve Board, Treasury Department, War Trade Board, and Food
Administration with the following results:
- (a)
- Federal Reserve Board and Treasury Department believe that for the present at any rate there is no pressing necessity from their point of view why negotiations looking to adoption of plan for licensing shipments of gold from the United [Page 618] States to Mexico in sufficient quantity to cover commercial balances in Mexico’s favor should be resumed. They propose to continue their policy of licensing certain shipments for benefit of mining industry, for payment of certain taxes in Mexico City by oil concerns, and for use of sisal organization, and of refusing other applications. A telegram is being prepared by Mr. Strauss of War Trade Board suggesting a means of reducing such licenses without injury to our interests. This will be submitted to you in the near future for your consideration as to its practicability. In the event it later seems necessary actively to resume financial negotiations, the Board and the Treasury Department believe that the proposals made by Carranza and wired by you to Department can be promptly considered here and decision communicated to you by wire so as to obviate necessity of sending to Mexico a financial expert to assist you. However, if the need arises such an expert will go to Mexico.
- (b)
- The Food Administration is of course desirous of exporting from this country as little food as possible, and so is content to have these negotiations drag on indefinitely. However, if at any time this Department wishes the negotiations actively resumed the Food Administration will cooperate and is prepared to authorize McCarty to represent it and to assist you in every possible way. At the present time, a limited amount of food is being sent to mining companies and oil, sisal, and istle interests, and this will be continued.
- (c)
- The War Trade Board is issuing licenses to Mexico on recommendation of Food Administration and this Department, and is prepared to cooperate in any way the Department suggests. With respect to newsprint paper, this Government is not willing to have paper purchased in this country used to assist a campaign of misrepresentation directed against the United States and the Allies, and accordingly paper will not be licensed except under guarantees satisfactory to you. With respect to arms and war material for the army, this Government is unwilling at this time to divert such material from its own troops and from the forces of the Allies for shipment into Mexico.
- (d)
- The conference agreed that if negotiations were resumed they should be carried on in Mexico City, as much better headway could be made there than in Washington, for the reason that any decisions arrived at here would have to be referred ultimately to General Carranza who would perhaps be more likely to agree to proposals if the men carrying on the negotiations were near him to explain details. Of course, if negotiations are carried on in Mexico City, they should be carried on by you personally, assisted by such technical experts as you may see fit to consult.
- (3)
- The Government of the United States, respecting as it does the property rights of Mexicans within the territorial boundaries of the United States, expects that the property rights of citizens of the United States within the territorial limits, of Mexico will be protected by the Government of Mexico against injury and confiscation. [Page 619] In particular, the Government of the United States would be unwilling to conclude with the Mexican Government any arrangement for mutual exchange of commodities which failed to recognize the just rights of Mexican owners of private property in the United States and by citizens of the United States in Mexico. In this connection, the Department is forwarding to you by telegraph its views concerning the legal features of the Mexican decree of February 19, 1918, taxing oil lands.1 This Government cannot acquiesce in any action taken by the Mexican Government whereby legitimate vested American interests are appropriated by Mexico.
- (4)
- Having in mind the foregoing, Department suggests that you should reply to the note of the Mexican Minister for Foreign Affairs expressing regret at the failure of the negotiations and stating that the renewal thereof is in the hands of the Mexican Government and that you always stand ready to communicate any message from that Government to the authorities at Washington. In other words, Department believes that while great care should be exercised to prevent the Mexican Government from making a paper case in favor of Mexico on the ground that apparently the United States Government has adopted an attitude unfriendly to principle of reciprocal exchange of commodities between the two countries, at the same time the Mexican people should not be permitted to labor under the delusion that a renewal of these negotiations is in any way vital to this Government, and accordingly your attitude should be that renewal of negotiations would be undertaken out of deference to wishes of Mexico and not on account of any particular necessity on the part of the United States.
- (5)
- The above briefly summarizes the present views of the Department with respect to this matter. Realizing, however, that your knowledge of the situation is first hand, the Department does not wish to embarrass you by instructions. The situation you are confronted with is a difficult one. Enemy influence contending against your efforts is still powerful. The Department stands ready to give you every assistance in its power and if you advise that the negotiations should be actively resumed and energetically pushed by this Government, the Department is prepared to defer to your wishes and to use its influence with the other branches of this Government so as to meet your views. Please wire what procedure you advise.
Lansing