The Under Secretary of State (Welles) to President Roosevelt

Dear Mr. President: In accordance with your instructions,81 arrangements are being made for the initiation in the very near future [Page 457] of the conversations between representatives of this Government and of the Mexican Government leading to the establishment in Mexico of a 100 octane gasoline plant. It is anticipated that the representatives of the Mexican Government will arrive in Washington within the next few days.

The Department, in agreement with the Petroleum Administrator for War, envisages a contract between the Mexican Government’s petroleum organization82 and an American concern of recognized standing, experienced in the design and operation of similar refining plants. Financing can presumably be arranged through the Export-Import Bank. The entire project, from the technical point of view, will have the benefit of review by the Petroleum Administrator and also by the War and Navy Departments to ensure a maximum correlation with military requirements. The contract will presumably include a clause giving this Government control over the marketing of the exportable surplus of products to be produced by the new plant during the life of the financing.

As soon as full agreement has been reached with the Mexican Government, it will undoubtedly be necessary for you to send a directive to the War Production Board in order to ensure the prompt scheduling of the necessary materials for the construction of the proposed plant. As you are aware, these materials are in extremely short supply and, if the commitment which we plan to make to the Mexicans is to be promptly and efficiently implemented, there is no doubt that an expression of your interest in the matter will be imperatively required.

Faithfully yours,

Sumner Welles
  1. See memorandum from President Roosevelt to the Under Secretary of State February 19, and footnote 76, p. 455.
  2. Petroleos Mexicanos.