740.00111 A.R./406

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

No. 9201

Sir: I have the honor to record below the important details of a conversation between Finance Minister Suarez and Mr. Elmer Jones of Wells Fargo Company on September 28, 1939, as related by Mr. Jones to the Commercial Attaché. The Commercial Attaché reports as follows: [Page 63]

“Mr. Jones said that he told Minister Suarez that he and other parties which he represented had an interest in securing the German vessels now in Mexican ports. He said that he told Minister Suarez that he was particularly interested in purchasing the two German tankers, but, would also purchase the other freight and cargo vessels, excluding the Columbus if possible, because he felt that the latter vessel would be a white elephant. Mr. Jones said that he told the Minister that he knew that the German Government was indebted to the Mexican Government in excess of five million dollars and, therefore, the Mexican Government might be interested in taking over the German vessels in liquidation of the credits and resell them to him. Mr. Jones told the Minister that he could arrange to pay for the vessels in materials which the Mexican Government might desire, or, by full cash payment or by material and part cash payment.

“Mr. Jones said that the Minister replied that the German Government was reluctant to dispose of any of the vessels at this time and that the German Legation had tried to impress upon him that the war would be of short duration with Germany as the victor which would permit Germany to re-enter the Mexican market within a short time and with much greater force than heretofore. Mr. Jones said that the Minister also told him that the German Legation had given him the fullest assurances that all merchandise against credits established in Germany would be delivered as specified in the contracts.

“Mr. Jones said that he asked Minister Suarez if he thought that Germany could make the deliveries and if he believed that the war would be of short duration. According to Mr. Jones Minister Suarez replied that he was not in agreement with the German Legation on the two points mentioned above because he believed that the war would be of long duration and, furthermore, he had his serious doubts as to Germany’s ability to make the merchandise deliveries. The Minister advised Mr. Jones that he had made separate overtures to the German Government for the two tankers and was awaiting a reply. Mr. Jones then asked Minister Suarez if he would be willing to resell the tankers to him in case he succeeded in purchasing them. The Minister replied that the two tankers would be of very great importance to Mexico’s petroleum industry and that he would not be interested in reselling the tankers. Mr. Jones then asked Minister Suarez if the latter would be willing to resell the three tankers which are now under construction in Italy and the Minister replied in the negative giving the same reasons as just previously stated, in the case of the two German tankers.

“Mr. Jones asked the Minister if Germany did not fulfill its merchandise deliveries would he be interested in taking over the German vessels and reselling them to him. He said the Minister replied to the extent that he would fully cooperate in this matter.

“Mr. Jones said that the petroleum question was discussed casually between himself and Minister Suarez and that during the conversation Minister Suarez indicated to him that he thought a man of his type as negotiator would have a good opportunity of settling the petroleum question.

“Mr. Jones said that he discussed with Minister Suarez the question of the National Railways of Tehuantepec and the latter requested that Mr. Jones accompany Ulises Irigoyen on an inspection trip of [Page 64] the Tehuantepec Railway. Mr. Jones said that he accepted the invitation and would leave within the next few days for the Isthmus.

“As a result of his conversation with Minister Suarez, Mr. Jones said he reached one very definite conclusion. He said he recalled very distinctly the activities of the German Legation during the last world war and the success which it had in convincing the Mexican Government that Germany would be the victor and return Texas and other portions of the Southern United States to Mexico. Bearing that in mind Mr. Jones said he could readily see that the German Legation was now employing the same tactics with Administration officials, trying to convince them that the war would be brief with Germany as the victor. Mr. Jones said that he had no evidence or intimation that Germany had made any promises to Mexico and that, furthermore, contrary to the Carranza Administration he believed that the present activities of the German Legation would fall upon deaf ears in most cases. Mr. Jones said an instance of this was the statement of Minister Suarez that he did not agree with the German Legation that the war would be brief and that Germany could make the merchandise deliveries. Mr. Jones said that he told Minister Suarez that if the United States was compelled to enter the present war Mexico could probably not avoid doing the same thing and he said that Mr. Suarez agreed with him.

“As a matter of explanation Mr. Jones told me that he had discussed the purchase of the German ships with Mr. Thomas W. Lamont before leaving New York and that Mr. Lamont had shown considerable interest. Mr. Jones said that when he arrived in Havana and was on his way to Mexico, he received a telegram from Mr. Lamont stating that he had discussed this matter with officials of the State Department and that they had displayed some interest. In other words, Mr. Jones seems to be representing himself and Mr. Thomas W. Lamont in his conversation with Minister Suarez.”

In connection with the foregoing, please see the Embassy’s Despatch No. 9198 of September 27, 1939.

Respectfully yours,

Pierre de L. Boal