812.5018/14
The Secretary of State to the Mexican Ambassador (Castillo Nájera)
Excellency: I have the honor to refer further to Your Excellency’s note no. 10377 of October 15, 1942,42 expressing the hope that arrangements may be effected to make it possible for Mexico to import between 150,000 and 200,000 tons of wheat of American origin, F.O.B. Laredo, Texas, at an approximate price of $1.00 per bushel. I also refer to my note of December 18, 1942,42 in which you were informed that, in view of Mexican interest in and need for wheat, the Department of Agriculture was prepared to institute a wheat export program on the basis of payments in connection with exports not to exceed 25 cents per bushel.
I have now received a report from the Secretary of Agriculture informing me that the program was announced on December 2, 1942 on the basis of an export subsidy of 20 cents per bushel. He further [Page 430] informs me that on January 12, 1943 the subsidy rate was increased to 25 cents per bushel.
Referring to further developments in this connection, the communication from the Secretary of Agriculture reads in part as follows:
We are informed that the Mexican Government has just negotiated contracts for the purchase of around 2½ million bushels of Canadian wheat, and that it was planned to move this grain through the United States by rail. I am informed, however, that the War Production Board and the Office of Defense Transportation, in the interest of national defense and the war effort, are opposed to the use of large quantities of United States rail equipment and labor for such an extended haul and have accordingly taken steps to halt such movement. This decision was taken in the light of the fact that the United States has large stocks of wheat in Texas and Oklahoma, which are readily available for shipment to Mexico.
We trust that the Mexican Government may be made fully aware of the strain now being placed on United States rail transportation facilities by the expanding war effort and informed that the proposed movement of Canadian wheat across the United States would seriously interfere with defense needs of the United Nations. At the same time, however, I would like to point out that the Department of Agriculture, through its action in raising the subsidy rate to the maximum level of 25 cents per bushel, will be making wheat available at Laredo, Texas, basis present market prices, at approximately the same net price basis reported in the recent Mexican purchase of Canadian wheat.
Accept [etc.]