812.659/80

The Acting Chief of the Foreign Funds Control Division ( Meltzer ) to the Assistant to the Alien Property Custodian ( Tucker )

Dear Tuck: I was glad to receive your letter of August 12th and the copies of your letters of August 14th67 to Jim Markham.68

The negotiations seem to have gotten off to an excellent start, and we all feel that you and the Ambassador have very skillfully handled a very difficult situation.

As you know, we were not particularly wedded to the idea of a development corporation. It may be useful as a kind of historical note, however, to make a distinction between two questions. The first question is whether or not a development corporation would be a desirable mechanism for organizing the resources of the Alien Property Custodian and the other American companies in connection with the Mexican program. The second question is the degree of intervention which such a development corporation or any other instrument, such as GAF,69 for example, would exercise in the internal management of Mexican businesses. We always recognized that the degree of such intervention would be a matter to be worked out with the Mexicans. However, it seemed to us that even if it were decided to have management which was exclusively Mexican, the development corporation might be an effective instrumentality for organizing United States participation. For example, it might have functioned as the instrument by which American technicians or supplies might be made available to the Mexican management corporation even though it (i. e. the [Page 524] development corporation) did not participate at all in internal operations in Mexico.

I have felt that we did not draw this distinction with sufficient clarity. We would, of course, have been clearer but for the fact that the Cyanamid negotiation and various reports from Garfías and from Mexico indicated that the Mexicans were prepared to accept a considerable degree of American participation in management.

It has been very pleasant to read Ambassador Messersmith’s commendatory reports about your work in Mexico. I hope your mission will be as pleasant as it has been effective.

Sincerely yours,

Bernard Meltzer
  1. None printed.
  2. Deputy Alien Property Custodian.
  3. General Aniline and Film Company (United States).