The Ambassador in Mexico (Daniels) to the Secretary of State

My Dear Mr. Secretary: In a conversation with Ambassador Castillo Nájera just before he left for Washington today, I took occasion to try to find out, entirely personally and unofficially, what his feeling might be regarding the possibility of reaching an early agreement on some, if not all, of the important matters of difference between Mexico and the United States. I found him most receptive to some such move. Of course, I told him that I had not discussed the possibility with you and that I could not discuss it with him or with President Cárdenas without first having your views.

I would like your reaction. I apprehend that the long drawn out oil difference might be a barrier, if it were intended to include it in any discussions. You will be the best judge of what could be done in that regard. You will also best be able to determine what particular questions, possibly involving financial settlements or other adjustments, in favor of Mexico by the United States, and in favor of the United States by Mexico, might be included in the list of matters on which adjustment might be sought. If the idea appeals to you my thought would be to have guidance from you regarding the possible scope of the discussions in order to explore the matter with President Cárdenas when he returns to Mexico City at the end of this month or the early part of April. My thought would be to find out from him whether he would like to have an informal and confidential examination of the possibilities made, and would appoint someone to study them with us with this in view. I apprehend that in that event both you and he would wish to have a study made and recommendations presented for action by early in June, at the latest.

I think the desirability of having at an early date some fairly comprehensive arrangement with Mexico regarding problems warrant our making a special effort at this time, if the President is receptive and will meet us at least half way on such a proposition. In that event, the first step would be, I should think, for his representative and ours to draw up a list of questions on which both Governments would consider it possible to come to an agreement at this time.

Awaiting your reaction to this suggestion, I am [etc.]

Josephus Daniels