The Director of the Office of Defense Transportation ( Johnson ) to the Secretary of State

Attention: Mr. Joseph F. McGurk

My Dear Mr. Secretary: Due to the critical situation with respect to the car supply in the United States, it became necessary on June 10, upon my insistence and the concurrence of the management of the National Railways of Mexico, that the Car Service Division of the Association of American Railroads place an embargo on the movement of cars of United States ownership into Mexico. However, an appropriate permit system was established.

There has been no improvement in the return of these cars from Mexico since that time. In fact, the record is a little worse now than it had been for some time previous to the embargo. This indicates but one thing to me; that we have been too liberal in the issuance of permits. This, of course, was brought about by the desire to furnish the Mexicans with all the assistance possible in allowing commodities which they needed to be transported into that country.

The situation with respect to cars in this country has become very serious and is accentuated by the need of cars for the movement of the large grain crop which is now being harvested. It will be necessary, therefore, that the permits issued for the movement of cars into Mexico be materially reduced until the return of cars of United States ownership has been substantially increased.

We are informing you of the instructions which we are placing with the Association of American Railroads regarding this matter with the thought that you will be informed in the event complaints reach you or Ambassador Messersmith because of our action.

Very cordially yours,

J. M. Johnson