811.20 Defense (M) Mexico/345a: Telegram
The Secretary of State to the Ambassador in Mexico ( Messersmith )
661. The Department with other interested agencies has been discussing with Undersecretary Beteta the possibility of a contract between the two governments whereby Rubber Reserve Company would acquire, over a 5-year period, all crude rubber, including guayule, produced in Mexico and not required for essential uses in Mexico. It has been estimated here that Mexico’s potential annual production of guayule is not less than 10,000 tons, and of castilloa not less than 2,000 tons, and that Mexico’s annual normal consumption is only approximately 5,000 tons of crude rubber.
It has been suggested to Beteta that in any such contract Mexico agree to limit its consumption to a specified amount required for essential needs and his Government should consider the institution of a conservation program similar to ours, in view of the fact that in any event Mexico’s stockpile will not last indefinitely. Agreements of this type have been negotiated with Brazil and Peru. Beteta advises that his Government feels this is politically impossible. He left yesterday for Mexico City to consult with his Government on this problem.
It has seemed to the Department desirable to have in Mexico City during Beteta’s visit someone who is familiar with the latest developments here in the program for the acquisition of rubber in Latin America. Paul Hayes, Chief of the rubber branch of the Board of Economic Warfare, is accordingly leaving tonight by plane for Mexico City to be available for discussion with Beteta and the other Mexican officials. He is fully informed on the rubber program. He will work through and under the supervision of the Embassy. You [Page 485] should do everything possible to facilitate his efforts and work out with him all possible means of forwarding these negotiations. No specific plans have been made, but you and he can decide what is the best method of procedure. He has been authorized by Rubber Reserve to negotiate with respect to the terms of the contract if that seems appropriate during his stay, subject to its approval before any commitment is made with the Mexican Government.