812.659/100

The Ambassador in Mexico (Messersmith) to the Secretary of State

No. 12650

Sir: I have the honor to refer to the Embassy’s despatch No. 12649 of August 31, 1943,70 concerning the plans of the Mexican Government to establish a chemical industry in Mexico and with particular reference to the Embassy’s despatch No. 12148 of August 14, 1943, to transmit herewith a copy of the Spanish text of Note No. 359 dated August 27, 1943, together with an English translation thereof,71 in which the Mexican Government outlines the terms under which it is willing to accept the cooperation of the American Government for a chemical industry in Mexico.

In brief, the Mexican Government proposes to organize a corporation to take over the properties, interests and rights of certain German-owned companies now in the possession of the Mexican Government and which are engaged in chemical, pharmaceutical, dye and related activities. When organized, the holding company is to have absolute ownership over all the seized properties while maintaining within the corporation the integrity of each of the companies concerned. The Mexican Government is agreeable to the proposal that assistance required, either material, technical or administrative, be provided by means of separate contracts or agreements between firms controlled by the Alien Property Custodian and the corresponding firms controlled by the Mexican Government, or, in the event that no firm under the jurisdiction of the Alien Property Custodian possesses the appropriate factors, the cooperation of private American companies qualified by experience, ability and organization will be sought. The Mexican holding entity and the Alien Property Custodian shall each designate [Page 525] a commissioner to act in consultative capacity and in liaison between the Mexican organization and the Alien Property Custodian. Their chief function shall be to determine the character of the assistance needed and which American company or companies are best able to furnish it. The Commissioners shall also deal with the question of the creation of new or additional facilities necessary to the development and expansion of the Mexican chemical industry.

The communication from the Mexican Government takes note that the Alien Property Custodian, as director of the office of Economic Warfare, is in an advantageous position to facilitate the necessary arrangements for authorizing the exportation of supplies, subject to the exigencies of the united war efforts of the two republics, and states that a study will be made of the desirability of the gradual withdrawal from active use of former German trade marks hitherto in use by the seized firms.

The note accepts the proposal as set forth in the memorandum presented to the Foreign Office, a report of which was forwarded in despatch No. 12148 of August 14, 1943, with the exception of two slight modifications. These modifications consist in making the Board of Directors of the Mexican holding company responsible to the President-of Mexico, and in the designation of two commissioners, one to represent the Mexican holding company and one to be designated by the Alien Property Custodian instead of five commissioners as originally proposed. The modifications were suggested by Sr, Cabrera in a conversation which took place on August 14 and reported to the Department in despatch No. 12153 of August 16, 1943.72 The Embassy intends to make no acknowledgment of the note from the Foreign Office until it has received approval from the Department that the proposal and the acceptance of it by the Mexican Government satisfactorily meet with the obligations of President Roosevelt with President Avila Camacho in their conversation which took place in Monterrey.

Respectfully yours,

For the Ambassador
Thomas H. Lockett

Counselor of Embassy for Economic Affairs
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  2. Enclosures not printed.
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