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

The Ambassador of Mexico called to see me this afternoon. He told me that his two conversations with Mr. Richberg of June 18 and June 19 had been on the whole satisfactory. He said that in his conversation with Mr. Richberg yesterday he had agreed to omit the question of valuation in the bases of agreement and that Mr. Richberg had agreed to suggestions that the Ambassador had made whereby the Mexican Government would have a majority on the [Page 684] Board of Directors of the proposed new Mexican corporation to handle the oil properties, and that, without stating anything specific with regard to the nationality of the new manager, the selection of the new manager would be left to the determination of the Board of Directors. The Ambassador mentioned various other amendments which he had suggested with reference to the administration of the properties which had been accepted in principle by Mr. Richberg. The Ambassador believed that this memorandum would be supported by Beteta and would be accepted by President Cárdenas.

The Ambassador, however, was very much perturbed because in the covering letter which Mr. Richberg had sent him this afternoon conveying the final text of the memorandum which they had both agreed upon yesterday afternoon, Mr. Richberg had referred to the memorandum as the Ambassador’s own proposal. The Ambassador said it was absolutely impossible for him to agree to this since in the first place his Government had not authorized him to make what was tantamount to a new proposal; and that he saw no reason why either he, or Mr. Richberg, or the companies, or the Mexican Government should assume the paternity of this proposal and that, in his judgment, the only solution was for the memorandum to be regarded as an exchange of views between Mr. Richberg and himself for submission to the Government and to the companies. I told the Ambassador that I was in entire accord with his point of view, and that it seemed to me that this question was one which could readily be solved.

I thereupon called up Mr. Richberg on the telephone and explained the matter to him, and Mr. Richberg said he was quite willing to withdraw his covering letter of today and to let the memorandum stand as it had been before. He said he would get in touch with the Mexican Ambassador. Subsequently the Ambassador called me on the telephone and told me he had spoken with Mr. Richberg and Mr. Richberg had told him that he was quite willing to leave the memorandum without any covering letter, and that if the bases contained in the memorandum were acceptable to the Mexican Government and the companies, both sides could then take joint responsibility for it.

The Ambassador said that consequently he would leave early tomorrow morning to join President Cárdenas in Lower California, and that he was now for the first time really optimistic that an agreement in principle had been found. I expressed to him my very great satisfaction and my more than earnest hope that there would be no further delays and that he could notify me within the next few days that the basis now proposed is acceptable to his Government.

S[umner] W[elles]