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

No. 14,524

Sir: I have the honor to refer to the Department’s strictly confidential telegram No. 1955 of November 12, 3 p.m.…

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Keeping in mind the importance of Mexican oil resources being developed as rapidly and as effectively as possible, I have not failed to keep in mind the desirability of reopening conversations on major oil policy with the President and with the Foreign Minister at the earliest appropriate opportunity. During a conversation which I had the opportunity of having with the President last evening, I stated that I had had this conversation with Mr. Buenrostro, referred to in may letter to Mr. Duggan of November 28,99 and that it appeared that the situation with respect to the rehabilitation of the refineries and the construction of the high octane plant were progressing satisfactorily and that if all went well Mr. Buenrostro would be able to go to Washington in December in order to complete the arrangements with the Export-Import Bank concerning these projects. I referred with satisfaction to the final liquidation of the expropriations.1 I referred to the various memoranda which I submitted to the Mexican Government towards the end of 1942 and early in 1943 with reference to major oil policy and to the statements which he had made to President Roosevelt at Monterrey that in principle he believed these memoranda served as an adequate basis for further conversations.

I said to the President that the way now seemed to be thoroughly open for the discussions of this question of major oil policy in the most favorable atmosphere and that it was my intention to begin conversations with Dr. Padilla, the Minister of Foreign Relations, immediately on the basis of the memoranda already submitted. The [Page 471] President said that he was aware of the importance of this oil problem for us and for Mexico and for this Hemisphere and that he had been giving a good deal of thought to the matter and that I would find Dr. Padilla prepared to continue the discussions. The President said that it would be more helpful for us not to enter into details at the moment until I had carried on the discussions with Dr. Padilla further.

I called on Dr. Padilla in the Foreign Office this morning for the purpose of discussing major oil policy and was prepared to do so on the basis of the memoranda under reference and of the Department’s telegram No. 1955 of November 12, 3 p.m. Dr. Padilla said that he was prepared to enter into these discussions. He said that the Mexican Government had been giving very careful consideration to the problem of major oil policy. He said that he was fully familiar with the importance of the problem from our point of view as well as the Mexican point of view and of the advantage to this country. He realized the enormous strain we were placing upon our oil resources in the United States as a major burden for supplying most of the oil and lubricants for the war effort was falling on us.

Dr. Padilla said that he had discussed this matter with the President a few days ago and that under directions of the President he was entering into discussions first with Mr. Buenrostro, the head of Pemex, and Mr. Suárez, the Minister of Finance, who is on the Board of Pemex. The Minister said that while he had quite well in mind the memoranda to which I have made reference in this despatch he would wish to refresh his memory and have certain conversations with Mr. Buenrostro and Mr. Suárez before he entered into detailed discussions with me.… The Minister, however, said that the President and he were conscious of the fact that Mr. Buenrostro still believed that it would be possible for Pemex on its own to adequately develop the Mexican oil resources—and without the help of foreign private companies and capital. The Minister said that he thought that Mr. Suárez had a more understanding point of view so far as the necessity for the intervention of foreign companies and private capital were concerned. He had, therefore, made arrangements to meet with Mr. Suárez and Mr. Buenrostro before the end of this week in order to have a thorough discussion of this point. He made it clear that it would be necessary to convince Mr. Buenrostro of the fact that Pemex on its own resources would not be able adequately to develop the Mexican oil resources.

I said to the Minister that I was happy to hear that he and his associates were giving this continued and careful thought and to have this expression of his views. I said that as he knew, it was my opinion, and the opinion of my Government, that Pemex under the [Page 472] most favorable circumstances would not be able to develop the Mexican oil resources adequately within the next 50 years and by that time another fuel might have been discovered which would make the potential oils under the Mexican soil of no avail. I said that he realized from the memoranda which we had submitted that we envisaged the collaboration of American companies, and of foreign companies if the Mexican Government so saw fit, in the form of contracts with Mexico. I said that the matter had constantly a greater urgency and that I hoped that we would be able to renew our conversations very shortly.

The Minister said that he thought a great deal of ground would be gained if he had this conversation first with Mr. Suárez and Mr. Buenrostro and that immediately thereafter he would get in touch with me. He said that in the meantime he would also again study very carefully the various memoranda which we had submitted, which, however, he felt he had well in mind for he had been giving this matter constant thought.

With reference to the Department’s telegram No. 2050 of November 27, noon,2 covering the conversation with Mr. Garfías of the Cities Service, I thought it advisable in view of approaching conversations between the Minister and Mr. Suárez and Mr. Buenrostro to inform him of the fact that Mr. Garfías has been discussing the matter of his company with Mr. Suárez, the Minister of Finance. I told the Minister that we had informed Mr. Garfías that it has been and was the view of the Department and of this Embassy that it would be more desirable to await the conclusion of the conversations between our Government and the Mexican Government before specific conversations with the Mexican Government or Pemex were entered into with private companies. I said that Mr. Garfías had indicated that in his opinion Mr. Suárez was empowered to negotiate an agreement with Cities Service and I said that I doubted this in view of the fact that I doubted whether the Mexican Government would be prepared to proceed in conversations with an individual company before it had made any determination of policy. The Minister indicated that this was his view.

I shall keep the Department fully informed of developments and I shall keep this matter actively before the Minister of Foreign Affairs and the President.

Respectfully yours,

G. S. Messersmith
  1. Not found in Department files.
  2. For correspondence on this subject, see pp. 585 ff.
  3. Not printed.