710 Conference/2–545: Telegram

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

217. For Merwin Bohan. Your various letters greatly appreciated. Following is résumé of Department’s policy with respect to the economic portions of agenda:

Other American republics to join United States in reduction of barriers to free flow of trade and commerce. This will be embodied in an economic charter for the Americas covering the following points: 1. Fullest collaboration in accordance with the principles of the Atlantic Charter to secure for all improved labor standards, economic advancement, and social security. 2. Joint action to create conditions which will encourage an economy of abundance, expanded domestic and foreign trade and consumption, and thus, through maximum productive employment, permit peoples everywhere to be healthy, adequately clothed, housed, and fed, and to enjoy the rewards of their labor in dignity and freedom. 3. Elimination of existing forms of discrimination and prevention of new forms, and enjoyment of equal access to trade and raw materials. 4. Reduction of trade barriers and stabilization of currencies. 5. Elimination of excessive economic nationalism in all its forms. 6. Just treatment for enterprise, skill, and capital brought from one country to another. 7. Early action to bring into operation the International Monetary Fund, International Bank for Reconstruction and Development, and food and agriculture organization of the United Nations. 8. Adherence to system of private enterprise. 9. Prevention of cartels and combinations which restrict international trade or access to markets but with provision for necessary commodity agreements. 10. Recognition of rights of labor.
Agreement by the United States to assist other American republics in cushioning shock from termination of war purchases and in meeting internal economic and social problems. This will be covered by the following: 1. Wartime procurement program. No cutbacks will be made of government contracts without prior consultation with producing countries. After such consultation, cutbacks will be made on gradual basis over agreed-upon period. 2. Transition period. During transition period loans will be made on joint participation basis by the United States and the American republics concerned to provide for minimum essential production of raw materials needed to maintain the economies of the American republics and to permit orderly liquidation of surpluses. Amount of participation by United States and other governments to be determined by commodity involved and general [Page 84] economic condition of country concerned. Such transition loans to be general obligations of country concerned and not secured by commodities. Receipts from sales of acquired commodities by Latin American governments would be earmarked for repayment of the loans. This is, in effect, Courtney Brown’s49 proposal with addition of joint participation in credit risk by other American republics. 3. Facilities for sound economic development. Facilities will be made available for sound economic development programs to increase productivity of American republics. These will include technical assistance, provision of the necessary capital goods by the United States within the limits of the supply situation, and after the utilization of current dollar balances, long-term credits.

With reference to your recommendation regarding international commodity agreements, this Government will go no further than the position taken at the Hot Springs Conference.50 In addition to the foregoing, this Government will, after a policy has been reached on stock-piling and congressional authority secured for stock-pile operations, give favorable consideration to Latin American sources of supply.

This Government will also render assistance of an advisory character to those countries having surplus commodity disposal problems with the objective of orderly disposal of surpluses in the world market. This will particularly affect countries less experienced in marketing of specific commodities: for example, the case of Ecuador in disposing of its surpluses of balsa. Preliminary thinking regarding matching of European demands with Latin American surpluses has lead to no concrete results as yet.

The above general outline of this Government’s approach to the economic phases of the agenda is for the information of Ambassador Messersmith and you only and should not be communicated to the Mexican authorities although it may be used in the discretion of the Ambassador as a guide to his thinking in his conversations with the Mexican Government.

  1. Chief, Supply and Resources Division.
  2. That position was to favor agreements and arrangements to promote efficient production and adequate supply of food and agricultural products, to consider arrangements aiming at equitable prices, and to favor trade, financial and other arrangements to enable countries to obtain food and agricultural products. See telegram 1465, March 8, 1943, 9 p.m., to London, Foreign Relations, 1943, vol. i, p. 820.