740.00112A European War 1939/30059
The Ambassador in Mexico (Messersmith) to the Secretary of State
[Received May 6.]
Sir: I have the honor to inform the Department that the informal conferences on Proclaimed List matters between the Foreign Office and the Embassy are taking place weekly and that the progress being made is beyond what could have been anticipated. At these conferences, Ingeniero Topete Bordes is the representative from the Junta Administrativa and his honesty of purpose, frankness and profound knowledge of the action taken by the Junta has convinced the Embassy representatives of the earnestness and the thoroughness with which the Junta Administrativa has cleaned up the intervened companies since the Ambassador presented his informal memorandum to the Foreign Office on August 10, 1942. The Ambassador’s memorandum was forwarded to the Department in despatch No. 3415 of August 19, 1942.31 This memorandum created the three lists which [Page 492] constituted the three categories for all names upon the Proclaimed List. List No. 1 was composed of those companies and individuals, of prime importance to Mexico’s national economy, which should be intervened by the Mexican Government; List No. II comprised the names of Mexicans and others of little economic consequence which could be deleted as soon as List No. I was cleaned up to the satisfaction of our Government; and List No. III contained names of Japanese, Italians and Germans which should remain upon the Proclaimed List.
At the time the Ambassador prepared his informal memorandum to the Foreign Office, the Mexican Government was demanding that our Government take some immediate action which would free the intervened companies from the Proclaimed List, because the latter were under the operation and ownership of the Mexican Government, The expressed attitude of the Mexican Government at that time was that the American Government should not retain the intervened firms on the Proclaimed List because they actually formed or were a part of the Mexican Government. The Mexican Government said that, since these intervened firms were a part of the Mexican Government, the American Government had no right to say that internal transactions with the intervened firms would be a cause for listing upon the Proclaimed List. The stand of the Mexican Government was firm and, if maintained, portended the complete breakdown of the effects of the Proclaimed List within Mexico, with the exception of the control of exports from the United States by our Government, The demand of the Mexican Government for a delisting of intervened firms was so firm that it might have become the basis of a serious diplomatic controversy between the two Governments.
In such circumstances and conditions, the Ambassador took a very prudent, wise and courageous step when he proposed the global plan for a settlement of Proclaimed List matters in Mexico and presented it to the Foreign Minister, with the result that it saved our Government from an interchange of notes which might have proved extremely serious in our relations. The importance of bringing to a satisfactory conclusion as soon as possible the global settlement envisaged by the Ambassador and presented to the Foreign Office in his memorandum of August 10, 1942, is therefore apparent and cannot be over-emphasized. A settlement of this nature is so vital and important that it would be a serious mistake to let it be deterred or interfered with by a mass of minor considerations. The Mexican Government accepted the plan presented by the Ambassador in the good faith in which it was proposed and the minute it realizes that we are hampering or being unwilling to fulfill our end of the bargain, then, the Proclaimed List will return to the status in which it existed at the time the Ambassador [Page 493] presented his original memorandum of August 10, 1942. If this is permitted to take place, it would doubtless be very unfortunate for our relationships and greatly interfere with the solution of many other major problems which are now under consideration. This we cannot afford to permit, therefore the Embassy desires to urge the Department to give its prompt and careful consideration to such recommendations as the Embassy is making for deletions from the Proclaimed List after consultation with the Mexican Government.
The Foreign Office has demonstrated to the satisfaction of the Embassy that the intervened companies are the property of the Mexican Government and, in such instances as the Embassy has reported upon, it has satisfactorily cleaned up the intervened companies in accordance with the conditions outlined in the Ambassador’s memorandum. The informal conversations at the Foreign Office have not only surprised, but, in many cases, amazed the representatives of the Embassy with respect to the thoroughness with which the Junta Administrativa has fulfilled its undertaking that the intervened companies be thoroughly purged of undesirables so that they could be removed from the Proclaimed List. Not only has the Junta Administrativa intervened in those companies suggested by the Embassy, but, it went much further and intervened in additional companies which, after investigation, it found had Axis connections. A further indication of the thoroughness of the purge is found in the fact that, upon its own initiative, the Junta intervened the properties and other assets of original owners and employees of intervened firms. In addition, it has been established to the satisfaction of the Embassy that accounts of intervened firms and individuals which have been blocked in the Bank of Mexico are effectively frozen and an extensive vigilance is exercised by the Junta over the needs and mode of living of blocked persons. These are facts which should not be overlooked in determining whether or not the intervened firms recommended for deletion by the Embassy should be taken from the Proclaimed List. In those cases in which deletion is recommended to the Department, the Embassy is satisfied that the purposes and intent of the Proclaimed List have been completely fulfilled and that delay in removing such names from the List will serve no other purpose than to thwart the global settlement and bring ill will into our relationships.
Embassy despatch No. 8754 of March 27, 1943, informed the Department that the Mexican Government considers that the ownership and title to property of the intervened companies rest in the Mexican Government and that the former owners of the properties have no right therein. Embassy despatch No. 9464 of April 22, 1943,32 gave a very detailed description of operations and procedures of the Junta Administrativa,[Page 494]as well as the system of management and inspection installed in each intervened company. The speeding up of action on the part of the Junta Administrativa in preparing the intervened companies for deletion was the result of the global plan presented in the Ambassador’s memorandum of August 10, 1942. As the Mexican Government is fulfilling its part of the agreement in reference to the intervened companies, the Department is urged to bring to the attention of the Inter-Departmental Committee the character of the Ambassador’s proposal to the Foreign Office as set forth in his memorandum of August 10, 1942, which was accepted in good faith by the Mexican Government, and the necessity for prompt consideration and action on such recommendations as the Embassy submits in accordance with that proposal.
As of April 29, the Embassy has recommended the deletion of seventeen intervened firms. These recommendations were contained in despatches Nos. 9464 and 9600 of April 22 and April 26 respectively,33 and other despatches now under preparation for immediate forwarding to the Department. It is extremely important that the deletions mentioned in these despatches be cleared in time for publication on May 10. Each one of these recommendations has been studied and compiled in detail and it is believed that the Mexican Government should be encouraged by the appearance of the deletions. The companies in question have been cleaned up to the satisfaction of the Embassy and there remains no doubt but that the purposes of the Proclaimed List have been fulfilled.
Relative to List II, or, the list which contains names which the Embassy feels can be safely deleted as the intervened firms are removed, it is felt that no useful purpose can be served in quibbling with the Mexican Government concerning their deletion. When the intervened companies are deleted from the Proclaimed List, it will mean that the most important elements have been removed. The large and dangerous Axis companies and organizations will have been placed under the ownership and operation of the Mexican Government. A very large percentage of the names upon List No. II are there because they dealt with or acted on behalf of the intervened companies. Most of the persons on List No. II are Mexicans, and, legally speaking, they had a legal right to perform any business transactions within the Republic of Mexico which are not prohibited by Mexican law. This means that they had a legal right from the Mexican viewpoint to negotiate with a firm upon the Proclaimed List. Most of the persons on List No. II were not malicious in intent nor was there any indication that they were pro-Axis or anti-American. They were simply Mexican citizens conducting business within [Page 495] the Republic of Mexico. With the disappearance of the intervened companies from the Proclaimed List, it is believed that the names on List No. II can be safely deleted from the Proclaimed List and that was the understanding with the Mexican Government. Any additional information which the Department might desire concerning any names upon List No. II will be forwarded on request, but, the Department is urged, again, to use its best efforts to convince the Inter-Departmental Committee that List No. II should be removed from the Proclaimed List.
It will require approximately three weeks before our informal discussions at the Foreign Office will bring to a conclusion the study of all of the intervened firms. It is hoped that our recommendations on all intervened firms will be forwarded to the Department in time for publication on June 10. In the meantime, discussions are also under way concerning additions to the Proclaimed List. It is now necessary for us to consult not only with our British colleague, but with the Foreign Office before any recommendations for additions can be made. The Embassy believes that no additions to the Proclaimed List should be published on May 10. Beginning with June 10, the remaining twenty-nine additions agreed upon at the time Mr. Russell34 was here, plus additional approvals for addition since that time, can safely be published in reasonable installments until this phase of the matter might be fully taken care of. It is very important that in the publication of May 10 very few, if any, additions appear.
The importance of a global settlement of Proclaimed List problems in Mexico, as set forth by the Ambassador in his despatch No. 3415 of August 19, 1942, is so great that the Embassy has been very explicit in this despatch in making its recommendations to the Department as to what procedure it believes would best serve the interests of the two Governments involved. The Department can have the fullest assurance that every detail of the discussions between the Foreign Office and the Embassy, as well as each individual recommendation, is receiving the careful and weighed consideration of the Ambassador and his staff.
Respectfully yours,
Counselor of Embassy for Economic Affairs