812.659/75
Memorandum by the Under Secretary of State ( Welles ) to President Roosevelt
Ambassador Messersmith has telephoned from Mexico City. He has received the instruction recently approved by you, directing him to deliver to President Avila Camacho your letter regarding the Alien Property Custodian’s proposal to furnish management services for the Mexican drug and chemical companies and to deliver to the Mexican Government the note containing the Alien Property Custodian’s proposal. The Ambassador will, of course, carry out [Page 511] these instructions. He has requested that, before these documents are delivered, I lay before you the following expressions of his opinion:
The Ambassador has been informed by Señor Garfías that the American Cyanamid Company will withdraw its proposal to enter into a contract with the Mexican Government. He believes that, instead of proceeding along this line, the Mexican Government wishes to work out a management arrangement with a group of American companies.
The Ambassador believes that the Mexican authorities would not wish to enter into a contractual arrangement with a company which had been formerly controlled by the Germans.
He believes further that the Mexican authorities would not favor a management arrangement made through an agency of this Government. He says that he understands that two members of the committee in charge of this matter in Mexico have so declared.
He believes that the proposal would be embarrassing to the President of Mexico, since the Ambassador believes that President Avila Camacho would not be able to accede to the proposal, and yet will find it most difficult to refuse the proposal endorsed by the President of the United States.
Finally, the Ambassador expresses the opinion that the proposal may result in no action being taken, with the result that after some lapse of time companies may find their way into private hands, and the replacement program may be prejudiced.
It was explained to the Ambassador that most of the points which he raised were canvassed by the agencies which have participated in the consideration of this matter and in the preparation of the memoranda for your consideration. However, he urges strongly that his views be presented to you. I presume that you will wish the instruction to stand and wish me so to inform the Ambassador.