740.00112a European War 1939/25228
The Chargé in Mexico (Bursley) to the Secretary of State
[Received February 13.]
Sir: I have the honor to inform the Department that a conference was held at the Foreign Office on January 25 between Mr. Tello,15 the Commercial Attaché16 and the Economic Counselor17 on several different subjects, including: (1) the Proclaimed List; (2) seizure of intransit rubber; and (3) payments to Switzerland for merchandise. This was the first of a series of informal conferences to be held at the suggestion of the Foreign Office in order that various subjects might be treated informally instead of by means of the more formal procedure of notes or memoranda. This despatch treats only that part of the conversation which concerned the Proclaimed List.
Mr. Tello said that the Inter-Secretarial Committee, composed of Cabinet Ministers, had reached the conclusion that the Mexican Government had taken very strong and advanced measures in the case of intervented Axis firms, in fact, much stronger and more severe than had been the action by most other nations. Mr. Tello said that, however, this was not the reason why the informal conferences had been suggested, but, the Inter-Secretarial Committee wanted our Government to know that certain insurmountable difficulties had been encountered by the Mexican Government in its attempt to carry out all of the provisions of the Alien Property Law. He stated that under the circumstances it was decided that through informal conferences an avenue of procedure could be worked out which would be acceptable to the American Government as well as feasible for execution by the Mexican Government.
. . . . . . . . . . . . . .
In summary, the suggestions of Mr. Tello are that (1) intervented [Page 481] firms which have been sufficiently freed of undesirable elements should be removed from the Proclaimed List; (2) those intervented firms not sufficiently freed of undesirable elements to warrant removal from the Proclaimed List should be studied and suggestions made as to what requirements must be fulfilled to cause their removal; (3) those companies on List III of sufficient size to warrant intervention should be suggested for such action; (4) those companies on List III not of sufficient size to warrant permanent intervention should be listed for closing; and (5) individuals on List III could not be placed on a Mexican blacklist, but should be retained on the American Proclaimed List.
The above-described conference with Mr. Tello is of particular importance because of the very unsatisfactory situation which had developed in reference to the intervented Axis companies. The interventors in these companies are direct representatives of the Federal Government. They have taken over the management, accounts, property and transactions of the companies. The Mexican Government has taken the position that these companies are now under the full jurisdiction of the Government and, therefore, there should be no interference in any transactions which they perform or which are performed with them within Mexican territory. These intervented companies are sending out orders to non-Proclaimed List companies in Mexico which are signed or approved by the Federal interventors. If the non-Proclaimed List company refuses to supply the materials on the basis that the intervented company is upon the American Proclaimed List, then, the interventor immediately takes the matter up with the non-Proclaimed List company on the basis that it is refusing to sell to a company under the management of the Federal Government. The Department will well appreciate that this places us in a very embarrassing and uncomfortable situation, because in many cases imported American products are involved. The situation becomes more embarrassing when the non-Proclaimed List company asks the Embassy as to whether or not it should supply the material to the intervented company which is still upon the Proclaimed List. In other words, as matters now stand with reference to the intervented companies, many non-Proclaimed List companies are afraid not to supply the requests of the former, because of action which might be taken against them by the Federal Government. Consequently, the effects of the Proclaimed List, as far as transactions with intervented companies within Mexico are concerned, are being rapidly and surely annulled and the longer this situation is allowed to exist, the more chaotic it will become. Although these intervented companies cannot import direct from the United States, under force of pressure they are causing companies which do import direct to sell them [Page 482] merchandise. The Embassy has never taken the position that it has any control over commercial acts performed within the territory of Mexico, but, it has observed very carefully such transactions with Proclaimed List firms and has recommended to the Department that companies in Mexico dealing with Proclaimed List firms be placed upon the List so that they could not receive products from the United States. The pressure now being employed by the interventors is producing quite an unsatisfactory situation as far as the Proclaimed List is concerned and, therefore, the results of our conversation with Mr. Tello are of vital importance in arriving at a solution of the Proclaimed List problem in Mexico.
What Mr. Tello suggested is nothing other than the beginning of the solution of the second half of the Proclaimed List problem as suggested by Ambassador Messersmith to the Foreign Office. This unsatisfactory interim period was anticipated and could not have been avoided, therefore, the quicker the solution for the second half of the problem is put into effect, the sooner will the entire problem be satisfactorily disposed of.
The Department’s viewpoints on this subject are very urgently requested. A copy of this despatch is being forwarded for the personal attention of Ambassador Messersmith who is familiar in every detail with this problem. The subject of this despatch has been fully discussed with the Chargé d’Affaires ad interim.
Respectfully yours,
Counselor of Embassy for Economic Affairs