The Alternate Chairman of the International Committee of Bankers on Mexico ( T. W. Lamont ) to the Secretary of State
[Received September 24.]
My Dear Mr. Secretary: I should prefer that you should receive directly from the oil men such information as they may have, but in order to acquaint you beforehand with the view of the bankers in the matter, may I be permitted to explain to you, in confidence, that the proposition which (as explained to us) the Mexican government authorities made to the oil producers was, in effect, that the oil producers should organize a syndicate of bankers to buy up, in the open market, at 40% of par or thereabouts, a large amount of the Mexican government’s external obligations and then to make these available for the oil men to turn in at par in payment of their taxes. In this way the Mexican Government might make an actual remission of the oil taxes to the extent of 60%, yet it might be able to state that it was receiving full value in taxes, accepting its outstanding bonds in payment at par.
The attached draft of our letter to the oil producers explains the impracticability of this plan. Mr. Teagle and the other oil executives [Page 500] fully understand our point of view, and, I may say, are in accord with it. The letter attached is a first draft and may be subject to a slight alteration but nothing material.
Looking forward to seeing you on Monday at twelve o’clock noon,
I am [etc.]