710.G 1A/254: Telegram
The Secretary of State to the Ambassador in Brazil (Gibson)
83. Your 95, October 17, 11 a.m. The Department of course has not given any assurance that the question of debts would be taken up on American initiative at Montevideo. When we received word of the recent Mexican initiative to have this question put on the agenda [Page 32] of the Conference we advised the Mexican Government that this Government has no authority to deal with external debts due from foreign countries to private creditors in this country. We also pointed out that consideration was being given in this country to the formation of a central bondholders committee under the Securities Act, or (and this appears the more probable at the present time) the organization of a private group of outstanding, disinterested individuals to deal with the matter.
The Mexican Foreign Minister, Dr. Puig, who will head his country’s delegation to Montevideo, called on me on October 18 and discussed this matter. He indicated that Mexico could not abandon its initiative and that there would have to be some discussion of the question at the Conference. He indicated, however, that he would not press for any vote in the matter.
For your information: We would deprecate any discussion of this debt question at Montevideo. If, however, other states insist on discussing it we will not oppose a discussion but trust that no action at all will be taken by the Conference.
The Department has a copy of the draft text proposed by Mexico submitted by our Embassy at Mexico September 14. This includes debts and numerous other additions to Chapter 4 of the Agenda. This may not be the redraft of text referred to in last paragraph your 95. Therefore please secure text if possible and forward by air mail.