The Chief of the Division of Mexican Affairs, Department of State ( Hanna ) to the Secretary of State
Dear Mr. Secretary: I believe you are aware that the Mexican authorities have contended that the export tax on petroleum should be paid in New York City without giving the petroleum companies the benefit of the exchange, which ordinarily amounts to about 3%. The petroleum companies have not agreed to this and have suggested as a substitute that the tax should be paid in Mexican gold in Mexico.
Mr. Branch of the local office of the Mexican Petroleum Company informs me that the Mexican authorities have just agreed to accept payment of the export tax on petroleum in Mexico and in Mexican money for this time only. Mr. Branch adds that the tax is due for a three-months period and should amount to approximately two and one-half million dollars. It is my understanding that this entire amount should be transferred to J. P. Morgan and Company in New York to meet payments under the Lamont-De la Huerta agreement,46 but there appears to be some doubt as to whether this will be done.