862.852/14: Telegram

The Chargé in Mexico (Boal) to the Secretary of State

280. Finance Minister Suárez advises that Mexico is interested only in purchasing the two German tankers now in its ports by using cash credit which Mexico has in Germany. Suárez said German Embassy in Mexico advised that Germany would fulfill all merchandise contractual obligations against unused Mexican mark credits in Germany by sending merchandise through neutral port to Mexico. German Legation told Suárez that no further mark credits could be opened for account of Mexico. Suárez said equipment and merchandise contracts with Germany call for deliveries at specified intervals and that within two weeks he could tell whether or not Germany could make shipments as specified. Only in case Germany fails to fulfill contracts would Mexico be interested in purchasing German merchant vessels in its ports in order to liquidate credits. Suárez said a legitimate purchase of the merchant vessels would permit Mexico to place them under the Mexican flag without risk of seizure by belligerents. Suárez has made proposition through German Embassy for the two German tankers and is awaiting answer. Suárez stated Davis cash and carry purchase plan was progressing slowly but that processing contract with Eastern States has been increased to 25,000 barrels daily with Eastern States acting as sales agent in various European countries. Suárez said he had information that Davis is in Italy and will attempt to enter Germany. Anticipating rayon shortage Suárez attempting to [Page 58] increase existing rayon barter contract with Italy several million kilograms for storage purposes.

Telegraphed to American delegation Panama.