812.659/60
Memorandum by the Adviser on Political Relations (Duggan)41
After a very careful rereading of the file with regard to the proposed American Cyanamid deal with Mexico I feel constrained to express very great doubt as to the desirability of giving this project this Government’s blessing until other alternatives have been more thoroughly explored.
I do not believe that any careful study of this project can fail but reach the conclusion that it embodies strong monopolistic implications. Whatever may be the paper guarantees, the setup would be such that the American Cyanamid Company would be in a position [Page 502] effectively to prevent other United States drug and chemical concerns from selling their products on any important scale in the Mexican market.
I am unwilling to admit that there is no other alternative than this arrangement. In addition, I do not think that delay will really remove the possibility of closing either the pending deal or a deal based upon the same setup provided that after further exploration this seems to be the only feasible procedure to take. It seems possible that American Cyanamid might become annoyed and withdraw, but the deal is so favorable to the United States group involved that I feel confident others would come forward and gladly take the place of the American Cyanamid Company.
As a preliminary step I recommend that the Department assemble a meeting of the United States Government agencies involved and request their assistance in canvassing intensively other possibilities of assistance to Mexico in this matter. Once these possibilities have been developed in outline stage then the authorities of the Mexican Government could be informed of them and asked whether they would like to explore them with us in a Government-to-Government discussion.
In résumé, I do not believe that the Department should permit itself to be high-pressured into approving a project on the basis that it is “the only one” when the situation is not one that requires precipitate action. I think that the long-run disadvantages outweigh the immediate advantages, particularly when the immediate needs are not such as to require decision within a fortnight or a month. I believe that the Department should have the benefit of a more careful exploration before it decides on any proposal.
- Addressed to the Under Secretary of State (Welles) and the Assistant Secretary of State (Acheson).↩