812.5045/611: Telegram
The Secretary of State to the Ambassador in Mexico (Daniels)
251. Your 328, December 30, 7 p.m. For the Ambassador from the Under Secretary. The Mexican Secretary of the Treasury came to Washington on his own initiative and has exposed with complete frankness to the Secretary of the Treasury of the United States the critical situation confronting the Mexican Government. He has been received with the utmost courtesy and his representations have been listened to in the most friendly and understanding manner. I informed him personally last night that by order of the President the Secretary of the Treasury would this morning advise him of the willingness of the Government of the United States to purchase immediately 35 million ounces of silver held by Mexico in the Federal Reserve Bank of California and would continue for the time being the arrangement previously entered into for the monthly purchase of silver by the United States Government. He has expressed his utmost appreciation of the friendly attitude of this Government and of this practical evidence of its desire to act as a good neighbor in its relations with Mexico.
Under these conditions I am amazed by the impressions given you by the Mexican Undersecretary for Foreign Affairs. There has been no attempt directly or indirectly on the part of this Government to bring any pressure to bear upon the Government of Mexico. The Mexican Secretary of the Treasury himself has stated to me that what is essential in Mexico in order to avert a serious crisis is the reestablishment of confidence and that one of the essential prerequisites of such reestablishment of confidence is the reaching of a fair agreement satisfactory to both sides between the Government of Mexico and the American oil companies. No representations have been made either to the Mexican Ambassador or to the Mexican Secretary of the Treasury with regard to the present controversy between the companies and the Government other than the expression of the hope that an agreement could be reached satisfactory to both sides [Page 677] which would prevent either a continuation for an indefinite period of the present controversy or a complete cessation on the part of the companies of their operations in Mexico.
By authorization of the President and with the complete concurrence and approval of the Mexican Ambassador and of Dr. Suárez, I stated to them that it seemed to me that this is a very appropriate moment for us to discuss all the pending matters between our two Governments with a view to seeing whether an agreement of principle could not now be reached with regard to the distribution-of-water question, the agrarian problem, et cetera, so that the way could be cleared towards reaching in the year to come a satisfactory and friendly understanding between our two Governments on all of these matters. I believe very satisfactory progress has been made in this regard, and I am hopeful that these preliminary conversations may result in future agreements which will make it possible to settle some of these highly controversial matters at a time when such solution is feasible and not permit controversial subjects, such as the water-distribution question, to drag on until a situation is developed in both countries where a satisfactory agreement will be almost impossible.
I felt it desirable to telegraph you fully of this situation because of the exceedingly surprising and disturbing implications of the remarks made to you by Beteta. [Welles.]