812.6363/3109: Telegram
The Ambassador in Mexico ( Daniels ) to the Secretary of State
[Received March 22—3:30 a.m.]
63. Neither General Hay nor Beteta at Foreign Office today. Late this afternoon I saw Beteta at his home and conveyed strong feeling of Secretary that expropriation action had surprised and shocked him because the United States had striven in an unofficial and friendly way to collaborate with Mexican officials in the proper development and pursuit of a reasonable course on their part. I told him that the Secretary considered that the present action of the Mexican Government with respect to petroleum would prove disastrous to Mexico and extremely embarrassing to the United States and to the economic and financial relations of the two countries. I also told him that Secretary Hull said he hoped that the Mexican Government could find a less drastic way of working out adjustments and settlements that would be reasonable to both parties. I added that our country had been the sincere friend of Mexico and therefore felt this strong appeal was justified.
I asked Beteta to make an engagement for me to see the President. He could not see him today but would do so as soon as possible and let me hear. I told him my Government felt that it wished to point out to the President the full import of the action. I will report as soon as Beteta answers.
Beteta said the President had requested him to say to me that he had authorized Minister of Hacienda Suarez to take up with the companies the amount to be paid for the properties and the method of payment. He hoped this could be arranged by an agreement by which the companies could receive a fixed amount of the production of oil and the Government the balance. He said that inasmuch as the companies could not get on with the workers and the Government could, this might be better than any other arrangement. This would prevent a drastic break in the price. Later I conveyed this message to Mr. Barber, representative of the Huasteca Company, who will communicate it to the managers of the other American companies. Mexico, Beteta said, wished to sell to democratic nations, the United States and Great Britain preferred. It has no relations or sympathy with Fascist countries and would not willingly sell to them. I asked about the report that Mexico had plans to sell to Japan. He denied this, but said he had learned that Petro-Mex82 had sold to a Mr. Thomas, an Englishman, who in turn sold to Japan.
[Page 729]Beteta represents the President as feeling the responsibility for the break was due to the oil companies and he said that the financial situation was so acute Cárdenas felt that longer delay would be injurious.
I took up with him the difficulties in and around Tampico, reported in my telegram 61, March 11 [21], 7 p.m.83 and he said he would immediately endeavor to get adjusted. He said that at a time of excitement like this irregular things were bound to occur but he felt sure they would be straightened out within a few days.
All the daily papers here support the Government and they report that ex-President Rodriguez had called and pledged his support.