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

No. 4187

The Secretary of State informs the Embassy that during the past few weeks there has been considerable discussion of the Report of the Mexican-American Commission for Economic Coordination within the Department and in Interdepartmental Committees with particular reference in each instance to the possibilities for its prompt implementation. While the information given in the reports of the various committees is reasonably complete, nevertheless, in certain cases further investigation apparently is needed before active support should be given to all recommended projects by the Department. In two types of projects particularly there appears to be insufficient information as a basis for decisions on the granting of export licenses and priority assistance, i.e., the Department is in doubt as to whether support should be given to all of the cement and irrigation projects which were recommended. Each class of project will be considered in turn.

Irrigation Projects:

In the Sub-Committee’s report on agriculture, various irrigation projects are strongly recommended, in addition to El Palmito. The Sub-Committee states that “emphasis must be laid on the completion of projects that are furthest advanced and which will make the greatest contribution to the war effort of the United Nations and to the essential economy of Mexico.” The Report thus indicates that the present state of completion should be depended upon to determine priority. However, of the projects listed in Appendix G to the Sub-Committee’s Report, nine are shown to be less than twenty percent completed and four of these less than ten percent completed. In view of this fact, state of completion is of little significance in determining priority. Surely other factors are likewise of significance in establishing priority; for instance the amount of equipment needed for completion, the acreage which will be released for cultivation, the location of that acreage in relation to the location of consuming markets, and the type of crop for which the acreage is adapted.

It is considered that the determination of priority is highly essential. The completion of all of the nineteen projects recommended would require a substantial amount of equipment in short supply, such as trucks, trailers, plows, excavators and pumps. In view of this fact, it does not appear at all likely that sufficient equipment can be made available, either second-hand or new to complete all projects. Licenses covering small amounts of equipment are currently being [Page 421] approved but in order to guide the various interested agencies, it appears to the Department that priority should be established through additional study by the Embassy in cooperation with the appropriate Mexican authorities.


In accordance with the Commission’s recommendations, all possible aid is being given to secure needed materials for Fábrica de Cemento, Estación Lagunas, Oaxaca; and Cemento de Mixcoac, S. A. Through the completion of these projects, together with the other five projects included in the short-range or immediate expansion of the cement industry, the rated annual production capacity of Mexico will be increased approximately forty-six percent above the 1942 level (from 651,600 to 950,400 tons). If and when the other cement projects listed by the Commission are completed, the rated capacity will be increased an additional seventy percent to 1,607,400 tons. Applications for export licenses have been received covering certain of these projects and are now pending before the Office of Economic Warfare or the War Production Board.

It is not probable that the War Production Board will release the equipment necessary, both new and second-hand, for all of these projects. Therefore, it is necessary to ascertain which of them are the most deserving of support by the Department. There may be some doubt as to whether all are needed in view of the fact that if all were furnished equipment and put into operation, the rated capacity for production of cement in Mexico would be approximately three times the capacity in 1942.

In view of these recommendations, it is requested that the Embassy further investigate the need for additional cement plants and indicate those which the Department should support in the Office of Economic Warfare and the War Production Board. Although it is recognized that this may make necessary a short delay in further expansion, such a delay is not considered too important in as much as the short-range program to meet emergencies in the cement supply has been largely completed.