612.003/708
Memorandum of Conversation, by the Secretary of State
The Ambassador of Mexico49 came in upon my request. He inquired how I was getting along. I replied that I was overwhelmed with acute and difficult problems in the Pacific area and in Europe most of the time, and that, to my immense surprise, a real problem in a Latin American country had presented itself. I said that he could imagine my astonishment and that of most everybody in this country when they woke up yesterday morning and discovered that by a stroke of the pen the Mexican Government had done what perhaps no other important country in the world had ever done, especially in peace time, and that was to increase, without regard to the economic facts and without notice to anybody, more than 200 tariff rates, that is, about one-third of the commodity tariff rates imposed by Mexico were increased more than 200 percent on the average, to say nothing of the discriminating effects against our country; and that these rates were made to take effect retroactively, thus doing grave injustice to shippers and present contracts.
I then remarked to the Ambassador that he knew how long and earnestly I had striven to promote the good neighbor policy, and to bring about mutually profitable and cooperative relations between the people of our two countries, as well as of other countries; and that my whole efforts and aims were concentrated on that undertaking. I said it was tragic that, just at a time when we were striving to organize some thirty-five nations behind the program for the promotion and preservation of peace through trade, and to confront the German and Italian Governments with a broad world program dealing with every phase of the problems relating to economic appeasement and international order and conditions of permanent peace among nations, Mexico strikes the hardest possible blow against the prestige and the merits of this undertaking. I stated that I could not begin to express my deep and lasting disappointment, especially when this great program of economic appeasement was the only possible means of diverting the European countries from the road to militarism and aggression, and correspondingly discouraging Japan from her plans and purposes to create international anarchy in one-half of the world. I went on to say that, of course, I knew how the Ambassador had fought with me for these objectives and how deeply he felt on the general subject.
I then referred to the fact that, when Minister of the Treasury Suarez was here some weeks ago and came to my office and said that [Page 777] he did not see how he could get along without some increases temporarily of certain tariffs, I plead with him for forty-five minutes not to take such action. I pointed out how logical and wise it would be if his Government would move back to basic domestic policies, and thus take the one and only road away from a course that would get Mexico into deeper mud and mire the further she pursued an unsound domestic policy. I stated that it was clear that she could gradually move back on a sound course, thus giving confidence to people both in and out of Mexico, but that instead of doing this Mexico was still pursuing a hopelessly unsound course, which was not only scaring the capital of non-resident citizens out of Mexico but was scaring outside of that country domestic capital owned by Mexican citizens. I said that it ought to be patent to all that these conditions were impossible and will inevitably become more so, and that this amazing increase of tariffs was like a dose of morphine. It will seem good and comfortable from four to six months perhaps and then the patient will be still worse off by far, and looking in every direction for another temporary and expedient method to tide him over another few months when still another temporary and expedient device will be sought. In the end instead of helping the good neighbor policy, so far as Mexico and this country are concerned, the effect would be exactly the opposite.
I went on to say that, of course, I knew how the Ambassador himself felt about all these things, but that I would not be his friend, or the friend of his country and of mine, as well as of the great world movement we were interested in, if I did not frankly bring to his attention in the most earnest manner the extreme danger of the whole relationship between our two countries being jeopardized and injured for years to come by a threatened explosion in one or both Houses of the American Congress. Nobody here dreamed that, if Minister Suarez should override our advice and our pleas not to raise tariffs still further, they would be increased to the unimaginable heights of more than 200 percent on the average. I further emphasized the virtual impossibility of keeping alive and carrying forward in the mind of the public and with sustained public support our good neighbor policy without the cooperation of all concerned, and that such a policy could scarcely have been worse served by any one country than by the course adopted by Mexico.
I came back again to the earnest emphasis upon the necessity for Mexico getting back to sound basic and domestic policy as the only way out. The American public does not know what Mexico contemplates in the future with respect to debts, land seizures,50 labor and oil controversies, and similar policies and practices, with regard to which [Page 778] the Mexican Government thus far is understood to be indulging in every manner of excess. I said that I had been making personal appeals to Senators and Congressmen not to start an explosion in Congress concerning these various excesses and resulting injuries to American nationals. Congress has in its possession enough facts relative to unfair treatment of American nationals, especially in connection with land seizures, to present a very damaging picture to the American people, and that any day, if matters continue to develop as they have thus far in Mexico, we may have a violent eruption in one or both Houses of Congress, which will be calculated to bring about misunderstanding and hard feelings between our two countries for years to come.
I further remarked that no country in distress can get out of its difficulties overnight, and that when domestic planning for relief, reform and progress is carried forward too rapidly and too furiously, all past experience everywhere shows that it results in reaction and disaster. I stated that I desired to repeat for the fiftieth time my position and that of my Government and country to the effect that we would not have a single one of our citizens get one penny of improper advantage of the Mexican Government or its people in any line of business relations, and that, when the above conditions were possible or prospective, we would stand all the more strongly for the policy of fair treatment and fair dealing to every Mexican citizen and to the Mexican Government. I remarked that, of course, this policy cannot work just one way and that, so far, the American people were getting the definite impression that the Mexican Government and its people do not appreciate what we have been endeavoring to do, not only with respect to carrying out this rule of fair dealing but also with respect to all the other ways in which we have offered help to the Mexican Government and its people, as in the case of the silver purchases.
Finally, I referred again to the tariff increases as being unprecedented within my knowledge in any country of any consequence; that from no conceivable standpoint is it imaginable for a great country like Mexico, even if she were not interested in the Buenos Aires policies of an economic nature and the commitments of all of our governments in their support, or if she were not at all interested in the long view planning with respect to her domestic situation, to have a real justification for such amazing increases of one-third of her customs tariff as have occurred; that most of such increases are discriminatory against the United States; and yet the Mexican Government expects us to go on with all of our methods of help to her and her people, while this Government and its people, not only have failed to receive cooperation which is at all satisfactory, but have suffered losses and injuries. I said that the Ambassador knew how [Page 779] long and earnestly many of us have been working to carry forward the good neighbor policy, how much we thought of the Mexican people and how anxious we were not only to help them to an increasing extent, but also to have the powerful influence and cooperation of that great country in carrying forward the good neighbor policy at home and abroad, including the program of peace through trade. The Ambassador referred again to the tariff increases and said that he was surprised at the extent of the increases and said that he would telephone Minister Suarez and also send him an air mail letter. I then especially requested the Ambassador to keep in touch with me with regard to developments.