The Secretary of State to the Chairman of the League of Free Nations Association (James G. McDonald)

Sir: The Department is in receipt of your letter of August 18, 1919,95 in which you say that the statement regarding the admission of the oil interests in Mexico that they are paying $30,000, per month to General Pelaez has been made by several persons authorized by the oil companies to speak in their behalf, and in which you ask to be advised whether it is true that the State Department thus encourages American business in a practice which appears to many people to be fomenting armed rebellion against a nation with which the American Government is at peace.

In reply you are informed that with respect to the matter of payments to General Pelaez the Department has consistently maintained the position that it could not undertake to advise the oil companies but that the companies themselves should determine the course of action to be pursued.

I am [etc.]

For the Secretary of State:
Alvey A. Adee

Second Assistant Secretary
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