Memorandum of Conversation, by the Under Secretary of State (Welles)

The Mexican Ambassador called this morning at my request. After taking up with the Ambassador the Compañía Hidroeléctrica Potosina case, I asked the Ambassador to tell me what the latest developments might be with regard to the oil controversy.

The Ambassador said that Mr. Richberg had come in to see him very hurriedly a few days ago but without any communication to make to him other than to suggest that the Ambassador and he issue a joint statement declaring that the general bases for agreement had now been agreed upon by the President of Mexico and by the companies and that in consequence thereof the formulation of detailed plans as to the method of carrying out this agreement was to be placed immediately in the hands of experts selected by both sides. The Ambassador told me that he had replied that while he was willing to draft such a statement for the consideration of President Cárdenas, he thought that in as much as President Cárdenas had not yet given his consent to the plan for agreement proposed it would only complicate matters to send President Cárdenas such a draft statement. He said that President Cárdenas had telegraphed him today that he was communicating his decisions to the Ambassador by mail and the Ambassador said the letter containing these instructions would probably not reach him before the end of the present week. The Ambassador said that he was worried by the delay, and regarded as a bad sign the fact that there had now joined President Cárdenas at Hermosillo not only Beteta40 and one or two oil experts of the Mexican Government, but also the Mexican Secretary of the Treasury, Señor Suárez. The Ambassador seemed to be pessimistic as to the outlook.

I told the Ambassador that I trusted Señor Beteta would repeat to President Cárdenas what I had said to him, namely, that President Roosevelt and this Government believed the bases for settlement proposed were entirely equitable and fair to both sides and that it seemed to me imperative that an agreement be reached at the earliest possible moment in order to prevent further delay giving aid and comfort [Page 680] to those in both countries opposed to the reaching of any agreement.

The Ambassador said he also hoped that Beteta had repeated this to President Cárdenas, but that all that Beteta had said to him of his conversation with me was that I had urged a rapid agreement.

The Ambassador also talked at some length with regard to the visit he had had recently in New York from Mr. Patrick J. Hurley. He said that Mr. Hurley had given him to understand that his company had been informed by Mr. Richberg that President Cárdenas had already given his full agreement to the bases of settlement proposed. The Ambassador told him that this was not the fact and that while he personally believed all of the bases proposed would be satisfactory to President Cárdenas with the exception of that portion of the agreement providing for administration of the properties, he had no reason to think that President Cárdenas would agree to this particular provision. The Ambassador said that Mr. Hurley had then again brought up the question of the Sinclair group making a direct agreement with the Mexican Government even if the other companies did not fall in line. The Ambassador said that he had again thrown cold water on this suggestion and had emphatically stated to Mr. Hurley that he believed it to be in the interest of both sides that all of the companies reach agreement conjointly and not separately. The Ambassador told me he had gained the impression that Mr. Hurley was completely in the dark as to what the situation might be and was merely trying to find out from the Ambassador what the actual facts might be.

S[umner] W[elles]
  1. Ramón Beteta, Mexican Under Secretary for Foreign Affairs.