The Ambassador in Mexico (Messersmith) to the Assistant Chief of the Division of the American Republics (McGurk)

Dear Joe: I have to refer further to the Department’s airgram No. A–2556 [2356] of August 18, 2:30 p.m.,94 concerning the visit to Mexico City of Mr. L. H. Nuland, who is the liaison officer of the Petroleum Administration for War to the Department. I have also to refer to my airgram in reply, No. A–1925, of August 20, 11 a.m.,94 and to my letter to you of August 19.95

I said that I would be glad to see Mr. Nuland, and talk these matters over with him on his arrival here.

Mr. Nuland arrived here several days ago but I was out of the city for the week-end for an absolutely essential rest, and I did not see him until this morning. He explained that he had been in certain countries of Central America with respect to the petroleum pool arrangements.96 He referred to at least one shipment of gasoline which had been made by Pemex to Guatemala and one shipment which had been made to Salvador. He said there had been other shipments. The total volume of the gasoline shipped by Pemex to countries of Central America, however, had been very small. The volume, in fact, was not sufficiently important in any way to affect the situation. Mr. Nuland wished to know whether I considered that these shipments of Pemex to the Central American countries had any political significance. I told him that I could see no possible ground for any political significance to such shipments and that I thought from the [Page 464] political point of view, Mexico was not interested at this time in making shipments of gasoline to the Central American republics. Mr. Nuland said that he was very much interested to know that there were no political implications. I was not quite able to gather what political implications he thought such shipments might have, but they certainly do not have any, and I made this clear to him.

I told him that I thought Pemex was not interested in shipping gasoline to the Central American countries at this time. I said that production in Mexico had decreased and consumption had increased so that gasoline was really almost a scarce article here. I said that Mexico might be able to export some heavy fuel oils, but certainly could not export gasoline without injury to herself. There are certain areas in Mexico where gasoline is already short, particularly in agricultural areas, and this is partly a question of short supply and partly of distribution. I said I did not believe that Mexico or Pemex was for the present interested in shipping gasoline outside the country, and that if such shipments had been made, it was probable that they were the result of some special arrangements which had been entered into through some pressures.

I asked Mr. Nuland what the problem was in which he was interested, and he said that naturally these shipments from Mexico were disturbing so far as the pool arrangements were concerned. I told him that I could see this, but I gathered from what he said that the shipments had been so small as not really to affect the pool arrangements seriously. He said that this was so. I gathered therefore that it was more a question of principle.

I told Mr. Nuland that Mexico was not a party to the petroleum pool or to any of these arrangements and that she was of course free to ship petroleum to any destination she saw fit. She had a perfect right to do this, and I did not see how we should endeavor to interfere with it, except that the Mexican Government found that it was to its own advantage not to make such shipments; we were in a position to subtract from the allotments of the countries receiving gasoline from Mexico, any gasoline received from Mexico. I reminded him that even in times of war we and other countries endeavored to maintain normal channels of trade so far as we could, and that every country had a right to endeavor to maintain such normal channels as far as possible, and that other countries had just as much right to do this as we. He agreed that this was so but said that Mexico had not sent gasoline to these countries before.

I told Mr. Nuland that I thought it would be undesirable to raise this question with the Mexican authorities while he was here. I said that I was sure that the Mexican Government and the Pemex had no interest in shipping gasoline at this time to Central America. I said [Page 465] that I thought if the matter were brought to the attention of the Mexican Government in the proper way, the appropriate steps would be taken to stop such shipments. I said that the matter could be taken up either by the Department with the Mexican Embassy in Washington or by the Department with this Embassy, so that we could write a note to the Mexican Government and I would deliver it with the appropriate explanations. I thought the latter course was the best one for many reasons, and he agreed. I said that if he would furnish the Department the appropriate information as to shipments which had been made by Pemex to Central American countries and indicate this was disturbing the petroleum pool arrangements which were on the whole advantageous, the Department could then give me the necessary instructions and I would take up the matter with the Foreign Office and I was sure that Pemex would stop airy exportations of gasoline to the other American republics, at least during the war. I reminded him that Mexico was interested in much more major phases of the oil problem so far as we were concerned, than the question of sending a few gallons of gasoline which they themselves needed to Central American [countries], and that Mexico was interested in participating eventually in world distribution of petroleum products and that she would therefore have an understanding of these pool arrangements.

Mr. Nuland seemed to be thoroughly satisfied with what I told him and said that he would take up the matter with the Department on his return, along the lines indicated in this letter. The matter is really of very secondary importance because the quantity of the shipments has been very small and because I know that the Mexican Government has no interest in shipping gasoline at this time outside the country.

I shall be glad to take any steps which the Department thinks appropriate.

With all good wishes,

Cordially and faithfully yours,

G. S. Messersmith
  1. Not printed.
  2. Not printed.
  3. Not found in Department files.
  4. For correspondence on the pool arrangements in Costa Rica and El Salvador, see pp. 91 ff. and pp. 312 ff., respectively.