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

No. 6794

Sir: Reference is made to your despatch no. 20,043 of September 11, 1944, transmitting a memorandum dated September 6, 1944, received from the Mexican Foreign Office proposing that this Government consider a loan to the Mexican Government for the purpose of aiding Petróleos Mexicanos in the exploration and the development of Mexican oil resources. In your despatch, you point out that, when the Foreign Minister, Secretary Padilla, handed you this memorandum, he made reference to his visit to Washington in July and to his understanding that the President had indicated that this Government would be prepared to give consideration to the request of the Mexican Government for such a loan.

Reference is also made to your conversation of December 19, 1944, with the President, during which, according to the records of the Department, you discussed this question, and the President informed you that it would not be possible for this Government to make available to the Government of Mexico or to Petróleos Mexicanos a loan for commercial exploration and development of the Mexican oil resources, but, on the other hand, that this Government would be prepared to discuss the possibility of a loan for the development of an oil reserve for common or continental defense. The President further stated that any actual arrangements whereby American oil interests might participate in the development of the Mexican oil industry were matters resting between the companies and the Mexican Government, but that he saw no reason why your efforts should not be directed toward the facilitating of equitable arrangements to this end. The President also expressed his concurrence with the bases upon which you have heretofore conducted these conversations.

Accordingly, you are instructed that:

Your Government desires you to continue, on the same basis as heretofore, your conversations with the Mexican Government respecting the possibility of equitable arrangements between that Government [Page 1359] and American oil companies whereby the latter might participate in the development of Mexican oil economy.
Your Government regrets its inability to arrange for a loan by the Export-Import Bank or any other United States Governmental institution to the Government of Mexico or to Petróleos Mexicanos or to any other Mexican Governmental institution for the development of the Mexican oil industry in its commercial phases.
Your Government is still deeply interested in the possibility of the development of oil reserves in Mexico for common and for continental defense and would be prepared to discuss the possibility of a loan to explore and to develop such reserves.

There is enclosed the draft text of a proposed memorandum83 in reply to the Mexican memorandum of September 6, 1944. The Department leaves to your discretion whether or not this text should be presented as drafted and you are authorized to make such changes therein within the scope of your instructions as you may deem necessary.

The Department will be interested in your comments concerning Secretary Padilla’s reaction to the three points outlined above, and knows it need not emphasize to you its appreciation of the importance of your conversations both with respect to the President’s desire to do everything possible to secure adequate oil reserves for possible future military emergency and with respect to facilitating the reaching of arrangements between the Mexican Government and American oil companies.

Very truly yours,

E. R. Stettinius, Jr.
  1. Not printed.