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

My Dear Mr. Secretary: I have received your letter of June 28, your file MA 812.779/24, which I have perused with great interest and sympathy.

We have held several conferences here, participated in by the Association of American Railroads, the Interstate Commerce Commission, and the Office of Defense Transportation, concerning American cars in Mexico, a question long acute and extremely unsatisfactory.

To review briefly, on representations from the State Department, including Ambassador Messersmith in Mexico, we lifted the Mexican embargo the latter part of February. It was stated by Ambassador Messersmith, the American interests in Mexico, and the Mexicans that, if the embargo were lifted, the matter would rapidly clarify and become satisfactory. We lost 4591 additional cars to Mexico promptly. The embargo was replaced June 10, after long discussion with the State Department, Ambassador Messersmith, and the Mexican railroads. We have already lost 289 additional cars.

Under the replaced embargo, the exceptions are aviation gasoline (a commodity exceedingly short in the United States), lubricating [Page 1250] oils and greases, and railroad company material. Permits allow 55 cars of grain, 15 of flour, and 2 of lard per day. Yesterday at Laredo alone there were 600 cars for Mexico, 300 of which were cleared. The Mexicans furnished two engines. They were able to move only about 80 cars out of 300.

Along the Sante Fe Railway in the United States alone there are 245,000 bushels of American grain on the ground today for the want of cars. There are several other roads in the grain belt that are straining every effort to move a tremendous American grain crop for which there is an insufficient number of cars. Last winter we were sending cars into Canada with American grain on the ground, and it caused some considerable acrimonious comment which was fully justified. If the farmers in the Southwest were apprised of the Mexican car situation and the liberality we have extended, we would have a justified recurrence of senatorial investigation.

Be assured we’ll do all we can, but it seems high time the Mexicans exhibit some effort themselves. Such effort has been totally lacking up until this moment.

We will permit grain into Mexico, but there will be a corresponding decrease in other commodities allowed. Within a few more days, we will know whether the embargo as now existing will bring more cars out of Mexico than go in, say 80 percent in of those that come out. If that does not occur, we will rearrange the percentage to a lower figure in, but without expense to the food products, provided the food products don’t exceed the allowable percentage in.

Very cordially yours,

J. W. Johnson