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

No. 23,909

Sir: I have the honor to inform the Department that last evening I was received by the President of Mexico72 at his home in Los Pinos where we had a two hour conversation in which a number of matters were covered which will be reported upon separately. In this despatch I wish to report on the part of the conversation which pertained to loans in which the Government of Mexico has expressed an interest, from our Government, through the Export-Import Bank.

As background for what I shall be reporting in this despatch I would recall to the Department that before I left for Washington for consultation in the latter part of December 1944, the President of Mexico talked with me with regard to the needs of Mexico for loans from our Government during 1945 and for use during succeeding years. It will be recalled that on the eve of my departure for Washington the Minister of Finance, Mr. Suárez, sent me at the request of the President a memorandum73 outlining the needs of the Mexican Government for external loans and indicating that loans to a total of $150,000,000 for use during the next three to five years would be necessary.

At the request of the President of Mexico I discussed this matter informally with President Roosevelt on December 19, 1944 and the President at that time made certain observations in connection with loans by our Government in general and with specific reference to Mexico he indicated that our Government should view with sympathetic consideration such reasonable and proper requests for loans which Mexico would need. The President requested me to discuss the matter with Secretary Stettinius74 and the appropriate officials of our Government. A memorandum of my conversation with the President, dated December 19, 1944,75 is in the files of the Department.

After the conversation with President Roosevelt, I discussed this matter of loans with Secretary Stettinius, who also expressed his sympathetic interest and his opinion that reasonable and proper requests from Mexico should be given consideration but who expressed doubt as to the advisability of so large a global amount as $150,000,000 being [Page 1164] sought by Mexico at one time. In accord with the Secretary’s authorization I discussed the matter with Mr. Warren Pierson, the President of the Export-Import Bank, who is fully familiar with the Mexican financial situation. I also discussed the matter with appropriate officials of the Department.

It was agreed that on my return to Mexico I could say to the President of Mexico and to the Minister of Foreign Relations76 that while our Government would view with sympathy concrete requests for specific projects which would aid the economic development of Mexico and which were essential for Mexico’s needs, I was to state that it was believed that a global request for $150,000,000 was undesirable as it was obvious that Mexico could not use this money immediately and that for various reasons which appear in the correspondence which this Embassy has had with the Department it was not desirable for such a formal request in that sum to be made to our Government at the time. It was agreed that I should say to the President that any specific request for particular purposes would be given sympathetic consideration.

On my return to Mexico I discussed this matter frankly with the President of Mexico who, as the Department is aware, is a very understanding man. I also discussed it with the Foreign Minister; both of them were completely understanding that it would be undesirable for the Mexican Government to make any formal request for a loan in the amount of $150,000,000 and that thought was abandoned. The President and the Foreign Minister indicated that they would like to consider with the Embassy and our Government specific requests for the more urgent projects.

The Minister of Finance, Mr. Suárez, did not discuss these matters with me and I did not discuss them with him on my return from Washington. My conversations were entirely with the President and with the Minister of Foreign Relations as the President had indicated his belief that this channel was the more desirable one he wished to follow. Mr. Suárez, the Minister of Hacienda, and Mr. Espinosa de los Monteros, the head of the Nacional Financiera,77 both, however, did express a desire that Mr. Pierson, the President of the Export-Import Bank, come to Mexico to discuss the loans which the Mexican Government had in mind. The Department will recall that Mr. Pierson could not come because of other occupations until he came to Mexico City as an advisor on the United States delegation to the Inter-American Conference on Problems of War and Peace.78

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I informed the President and the Foreign Minister that Mr. Pierson was in the City and would be prepared to talk with Mr. Suárez as soon as I knew the President’s views on the matter. The President through the Foreign Minister indicated to me that the interest of the Mexican Government lay in three loans; one for a road program, one for rural electrification and one for the Mexican National Railways, and indicated that they would be happy to have Mr. Suárez, the Minister of Hacienda, discuss this with Mr. Pierson. I informed Mr. Pierson to this effect and he had, I believe, two conversations with Mr. Suárez, the Minister of Hacienda, during his stay at the Conference. Mr. Pierson indicated that he would give a memorandum of his conversations with Mr. Suárez to the Department. In Mr. Pierson’s oral reports to me of his conversations with Mr. Suárez, I gathered that Mr. Suárez had not been very specific with respect to these matters beyond indicating that the Mexican Government desired three loans for the above-mentioned purposes. Mr. Suárez indicated to Mr. Pierson that he would take up these matters with him in Washington later.

Immediately after the close of the Conference and the departure of Mr. Pierson, Mr. Suárez, the Minister of Hacienda, had telephoned to the Embassy to state that he was leaving within forty-eight hours for New York and Washington and would like to see me before he left. When this message reached the Embassy I had left for a two day stay in Guadalajara in order to have a brief rest after the Conference and I therefore did not see the Minister prior to his departure for New York and Washington.

I have given this statement of background in this despatch in order that it may be clear that my conversations with respect to loans for Mexico have been with the President and with the Minister of Foreign Relations, as the President had indicated his desire to discuss these matters directly with the Embassy and through the Foreign Minister.

While the ostensible purpose of the visit of Mr. Suárez to the United States was for the purpose of discussing the refunding of the external debt of the Mexican National Lines and while there is no doubt that Mr. Suárez had this as one of the objectives of his trip, the principal purpose was to discuss with Mr. Pierson the matter of loans. The Department is aware of the conversations which Mr. Suárez had with Mr. Pierson in Washington and I also understand he saw several officers of the Department but I have no adequate information concerning the substance of such conversations.

In view of the fact that there is a very important political situation in Mexico79 which we have to keep in mind and in view of the [Page 1166] fact that it was desirable that whatever announcement was made of such loans should be appropriately made, either by the Mexican Government in Mexico City or by our Government in Washington and not by Mr. Suárez, I brought certain important considerations of a political character to the attention of the Department. As my letters to the Department on this matter are very full, I will not enter into detail here. The Department was very understanding of these considerations, as is shown by the top secret letter of Assistant Secretary Clayton to me of March 29.80

In this letter and in a telegram of the Department, No. 613 of March 22, 1 p.m.,80 I was informed that the Export-Import Bank had given approval to the following loans: $12,000,000 to $15,000,000 for railroad equipment; $20,000,000 for electrification; $10,000,000 for roads in addition to the existing commitment of $20,000,000 which has not yet been used; and $2,000,000 additional for Altos Hornos.81 It was indicated in Assistant Secretary Clayton’s letter and in the telegram under reference that the foregoing were subject to clearance with the President.

I was later informed for my confidential information that while the Department and the Export-Import Bank were in agreement that these three loans in the above-mentioned sums were desirable for Mexico and our Government was ready to extend them, that President Roosevelt had indicated that it was his opinion that only one of these loans should be granted at a time and that the question as to which loan should be granted at this time was naturally a matter for the determination of the Mexican Government. I was therefore instructed by the Department to discuss this matter with the President of Mexico in order to determine which loan he considered of the most urgent and primary importance, making it clear that only one loan could be granted at this time but that this did not involve any lack of sympathetic attitude towards the other above-mentioned specific loans.

I informed the Foreign Minister in strict confidence of the foregoing and indicated a desire to talk with the President on the matter. An appointment with the President was arranged for Friday, April 6, which the President was obliged to cancel on account of illness and I saw him last evening at 7 o’clock.

The conversation briefly in substance was as follows.

. . . . . . . . . . . . . .

The President then went on to say that he would get in touch with Mr. Suárez, the Minister of Hacienda, by telephone today and give [Page 1167] him the following instructions. 1. He had continued with me the conversations with respect to loans and that he was understanding of the decision of our Government that only one loan could be approved at this time. 2. He wished the loan for the roads to be completed now as having the first preference and being the most important for Mexico. Mr. Suárez could proceed to complete the arrangements for the renewal of the $20,000,000 of the $30,000,000 credit for roads outstanding and for the $10,000,000 additional, which we were prepared to lend. 2. [3.] He would instruct Mr. Suárez not to continue any conversations with regard to other phases of the loans. 4. He would instruct Mr. Suárez that there was to be no publicity whatever with regard to these loans and that he was not to make any statement of any kind for publicity with regard thereto. 5. Mr. Suárez could remain in the United States until he had completed the paper work in connection with the renewal of the $20,000,000 credit and the $10,000,000 additional loan for roads or he could return to Mexico and later return to complete the paper work.

In view of the fact that the President had indicated that he would convey appropriate instructions to Mr. Suárez in Washington today, I deemed it advisable to convey the President’s decision with regard to the road loan to the Department by telephone instead of by cable and I therefore gave the substance of my conversation with the President to Mr. Carrigan over the telephone and the memorandum of the statement to Mr. Carrigan is transmitted herewith.82

I shall inform the Minister of Foreign Relations, Dr. Padilla, today of my conversation with the President.

I may say that the conversation with President Avila Camacho last evening has more than ever convinced me of the importance of our dealing with Mexico in this matter of loans in the most sympathetic and understanding manner. The President in his conversation yesterday showed an understanding of all factors involved in this problem, both so far as we are concerned and so far as Mexico is concerned, which is most unusual. Mexico has during the four years of his Presidency taken very important and constructive steps in the financial field and in the reestablishment of her internal and external credit. With respect to loans, both internally and externally, she has shown a very sound and constructive policy. She has kept her internal and external loans to a minimum and it is in many ways extraordinary to an informed observer what Mexico has been able to do during these last four years through the constructive use of public funds. For us not to recognize this constructive attitude which [Page 1168] Mexico has taken and the meticulous manner in which she has met her obligations, and the sound manner in which she is proceeding, would, I believe, be most unwise on our part.

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Respectfully yours,

George S. Messersmith
  1. Manuel Avila Camacho.
  2. Memorandum dated December 14, 1944, not printed.
  3. Secretary of State Edward R. Stettinius, Jr.
  4. Not printed.
  5. Ezequiel Padilla.
  6. A semi-governmental financial institution.
  7. Conference held in Mexico City, February 21–March 8, 1945; for documentation, see pp. 1 ff.
  8. Ambassador Messersmith was probably referring here to the increasing political pressures resulting from the approaching 1946 presidential election in Mexico.
  9. Not printed.
  10. Not printed.
  11. Mexican steel producing company.
  12. Memorandum of telephone conversation with John W. Carrigan, Chief of the Division of Mexican Affairs, not printed.