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

No. 14,309

Sir: I have the honor to refer to the Department’s airgram No. 2756 of October 25, 1943 advising the Embassy and the Resident Member of the Mexican-American Commission39 for Economic Cooperation that all projects recommended by the Embassy or the Commission should be accompanied by export recommendations for materials and products included in the projects and which are under an estimate of supply. The Embassy and the Resident Commissioner are cautioned not to expect any appreciable increase in estimates of supply and, therefore, to approve only those projects of the greatest necessity. The Department in the aforementioned airgram explains that the War Production Board established estimates of supply for [Page 427] Mexico after determining the quantity of materials which could be spared from the war effort of the Allied Nations and, consequently, should the estimates of supply for Mexico be substantially increased it would have to be done at the expense of the armed forces, the civilian population of the United States or the estimates of supply for the other nations.

The Embassy does not raise any question as to the soundness of the policy adopted by the Department and the other interested agencies of the Government. It is realized that the armed forces must come first and that Mexico must be content to share equitably with the civilian population of our country and with the other nations allied with us for the war effort. Nevertheless, it is very true that the conversation between President Camacho and President Roosevelt in Monterrey resulted in the formation of the former Mexican-American Commission for Economic Cooperation and, as a result, Mexico received the impression that it was intended that something special would be done to aid it in the development of its industrial, agricultural and other types of economic development. At the recommendation of the former Mexican-American Commission for Economic Cooperation the present Commission of the same name was created and is now functioning. During the first two meetings of the present Commission further encouragement was given to the Mexicans that they would receive special consideration in reference to materials and equipment for the construction of urgent and essential industries. The foregoing has been related so that the Department and the interested agencies of our Government will see that the Mexicans have been encouraged to have false hopes. If the policy to be followed by the Commission is that of recommending only those projects containing materials under estimate of supply which can be spared from the general requirements, then, the usefulness of the Commission in aiding economic development through the establishment of essential industries during the war emergency would be negligible. Under such circumstances the Commission would be principally confined to studying and recommending industries for construction and development after the emergency period. The Mexicans are principally interested in the assistance that they can secure now or during the period of emergency and they believe the Commission was established in a large measure for that purpose. They realize that long-term planning is a very advantageous thing but they feel that after the war equipment will be in much freer supply and Mexico will be able to purchase materials and develop industrially with little interference. Whether their viewpoint will prove to be right or wrong, that is the way they feel. They wish to receive all assistance for long-time industrial development which the Commission can render, but, their principal [Page 428] and vital interest is in what the Commission can do for them during the emergency.

When the Mexicans are advised that export recommendations for materials under estimate of supply must accompany projects recommended by the Commission, it will be a great disappointment to them. It is unfortunate that in the beginning they obtained the impression that they would receive some special consideration and assistance for industrial development during the emergency period. Two members of the Mexican section of the Mexican-American Commission for Economic Cooperation received word indirectly from Washington that materials and equipment under estimate of supply which form a part of a project recommended by the Commission would have to be in part or in whole deducted from Mexico’s general requirements. The statement of these two Mexican Commissioners to the American Resident Commissioner was to the effect that if this proved to be true it would be a great disappointment to the Mexican Government and to the Mexican people because the effectiveness of the Commission would be seriously reduced.

According to the Department’s instruction No. 4768 of November 15, 194340 and discussions already held with officials of the Mexican Government in relation to a “roll-back” of the decentralization plan,41 it is very probable that many types of machinery, including industrial machinery, will be removed from decentralization and the requirement of export recommendation on January 1, 1944. If this takes place, then Mexico will not be issuing export recommendations for industrial machinery and, therefore, there will not exist any means of complying with the instruction contained in airgram 2756 of October 25, 1943. The Foreign Economic Administration will be issuing licenses without a reference to the Mexican Government and the latter will not be in a position to say whether or not its general requirements will stand a deduction for an industrial project because it will have no knowledge of what has or what has not been licensed in Washington.

I am sure that the Department will readily understand that the Mexican-American Commission for Economic Cooperation is in quite a quandary at the present time as to just what procedure it should follow in recommending industrial projects. During this period of uncertainty I have recommended to the Resident American Commissioner that the American section of the Commission proceed with its detailed study of all projects presented to it by the Mexican section. I have requested that the American section study with great care the machinery requirements of each project so that when it is recommended [Page 429] it will contain the maximum of used equipment in order to reduce the requirement for new machinery and scarce materials. I have further requested that projects requiring immediate or prompt delivery of substantial quantities of new equipment be recommended only after a very careful consideration of their urgency.

Relative to the instruction contained in the airgram No. 2756 of October 25, 1943 to the effect that all projects recommended by the Commission should be accompanied by an export recommendation for materials under estimate of supply, I am sure that the Department will readily understand that the Mexican Government has already issued export recommendations which will absorb the estimates of supply up to January 1, 1944 and, therefore, no further recommendations can be issued against the estimate for this year. As it now seems probable that new machinery and equipment will not require export recommendations after January 1, 1944, it will be impossible for the Commission to comply with the Department’s instruction. However, as the Commission will use the greatest care and discretion in recommending industrial projects which require prompt delivery of new machinery, I feel confident that it will be complying as closely as possible with the Department’s wishes until further instructions are received in regard to its procedure.

Respectfully yours,

G. S. Messersmith
  1. Presumably A. W. Patterson, Assistant to the Commissioners and Secretary of the American Section of the Mexican-American Industrial Commission.
  2. Not printed.
  3. For correspondence on the plan to decentralize export controls, see vol. v, pp. 106 ff.