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

No. 9198

Sir: I have the honor to enclose a memorandum of a conversation I had this morning with Licenciado Beteta, Acting Minister for Foreign Affairs, with regard to the desire of the Mexican Government to purchase certain German vessels in Mexican ports.

The enclosed is transmitted for the strictly confidential information of the Department.

Respectfully yours,

Pierre de L. Boal

Memorandum of Conversation, by the Chargé in Mexico (Boal)

In the course of my conversation with Licenciado Beteta this morning he said that the Mexican Government has been negotiating with the German Government with a view to purchasing two of the German ships (tankers) now in Mexican harbors since the Mexican Government is badly in need of tankers. The object is to credit them against German indebtedness to Mexico for oil, which amounts to about 18 million marks. The German Government has not yet replied. He said that this purchase would be in lieu of taking the German material which was originally proposed in exchange for delivery of oil which occasioned the Mexican credit in Germany. He said that he was acquainted with the suggestion that all German vessels now in Mexican ports might be purchased by American interests, and that he thought this was a very good idea. He said that, although he knew for a certainty that the German ships are now under the control of the German Admiralty, he thought title still rested with the individual German steamship companies, and that he thought Mexico might be able to make some arrangement with Germany for the purchase and eventual transfer to the American interests, retaining that part of the purchase price which would represent the balance of Mexican credits in Germany. He said he supposed it would be necessary to give some assurance that they could not be resold to belligerents. I gathered that his idea was to have the American interests buy only those ships which are not tankers, and that Mexico would keep the two tankers, presumably buying them separately under the negotiations already initiated.

Licenciado Beteta also said that the Mexican Government had recently purchased two ships in the Scandinavian countries—the Bita [Page 61] and the Binta—both tankers. The Mexican Government had paid something like 103 thousand dollars for one of these, and an amount close to that for the other. Apparently the ships had not as yet been delivered, and he was rather disturbed lest war conditions would obstruct the consummation of the deal, or lest they should fail to reach Mexico.

He said that recently Mexico had purchased a tanker from the Cities Service Company in the United States, but that our Maritime Commission had refused to allow the transfer to take place. He understood that this refusal was not directed at the Mexican Government, but was destined to preserve American shipping for American needs.