Foreign Relations of the United States, 1946, The American Republics, Volume XI

812.24/5–246

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

No. 29,319

Mexico, D.F., May 2, 1946.
[Received May 8.]

Sir: I have the honor to inform the Department that on the evening of April 26, 1946, the Minister of Foreign Relations of Mexico, Dr. Castillo Nájera, requested me to call at the Ministry. He said he wished to discuss the Lend-Lease obligations of Mexico towards the United States. He then went on to read me the text of a memorandum which he had prepared covering a conversation which he had had recently in Washington with President Truman and with Secretary Byrnes. It will be recalled in this connection that Dr. Castillo Nájera recently spent some weeks in the United States to attend the meetings of the Security Council in New York City and later several days in Washington during which time he had this conversation with President Truman and Secretary Byrnes. Dr. Castillo Nájera said that under instructions of the President of Mexico he had taken this opportunity to discuss the Lend-Lease obligations of Mexico.

The memorandum which Dr. Castillo Nájera read to me was a relatively long one. It went on to refer to the original Lend-Lease agreement between Mexico and the United States.¹⁴ It then went on to refer to the circumstances surrounding the second Lend-Lease arrangement,¹⁵ in which the amount available for Lend-Lease to Mexico was considerably increased. The memorandum covered the conversations which Dr. Castillo Nájera had had with the late President Roosevelt but more particularly the conversation with former Under Secretary Welles. In the memorandum Dr. Castillo Nájera specifically states that when the second Lend-Lease conversations took place, primarily with then Under Secretary Welles, he desired to fix the total amount at $71,000,000.00; that Dr. Castillo Nájera as the then Mexican Ambassador in Washington stated that Mexico could not undertake an obligation in that amount as she could not possibly repay it; and that then Under Secretary Welles stated that it made little difference what the amount stated was or what amount might be used under the agreement as Mexico would not be requested to repay it. The memorandum goes on to recite that in spite of this statement of then Under Secretary Welles, Dr. Castillo Nájera as the Mexican Ambassador in Washington indicated that the amount should be set for a smaller sum.

The memorandum then sets forth that this information was conveyed to President Truman and to Secretary Byrnes by Dr. Castillo Nájera during the conversation recently, under reference, and that President Truman stated that this was the first time that he had heard anything about the matter and turned to Secretary Byrnes and asked him what he knew about it. The memorandum states that Secretary Byrnes replied that he knew nothing about the matter but would inform himself.

The memorandum then goes on to state that after leaving the White House, Secretary Byrnes indicated to Dr. Castillo Nájera that while he would go into this matter he thought it was desirable that the Mexican Ambassador in Washington should be authorized to discuss this matter with Assistant Secretary Clayton in the Department of State who had matters of this kind particularly under his consideration and the memorandum further states that the Mexican Ambassador then indicated that this would be done.

The Department will note that the foregoing is a brief résumé of the memorandum which Dr. Castillo Nájera, the Mexican Foreign Minister, made of his recent conversation with President Truman and Secretary Byrnes for the President of Mexico and which he read to me but of which he did not furnish me a copy.

Dr. Castillo Nájera then went on to say that he had presented this memorandum to the President of Mexico and that appropriate instructions would be sent to Mr. Espinosa de los Monteros, the Mexican Ambassador in Washington, to discuss this matter with Assistant Secretary Clayton. Dr. Castillo Nájera said that Mexico was desirous of meeting these obligations which she had undertaken but he saw no way that she could do so. There were other obligations which she had which were considered of greater importance to meet and that sometime in the future Mexico might be able to meet these obligations but presently she could not. He then referred to the notes which the Mexican Embassy in Washington had been receiving from the Department of State with regard to the installments due and said that the Mexican Government had made no reply thereto as it was in a very embarrassing position, and it was in order to present the Mexican situation that he, under instructions of the President of Mexico, had sought this conversation with President Truman and Secretary Byrnes. He said that the President of Mexico had asked him to inform me of the foregoing.

I then went on to say to Dr. Castillo Nájera that while Licenciado Padilla had been Foreign Minister of Mexico the question of these installments due on the Lend-Lease obligations of Mexico had arisen in an informal way just as it had arisen in an informal conversation with him (Dr. Castillo Nájera) some time ago. I said to the Minister that he would recall that I had said in an entirely informal way to Licenciado Padilla and to him that I had no information of a definite character with regard to the ultimate attitude of our Government on these Lend-Lease obligations of the American Republics but that I had in various communications to my Government informed it that, in my opinion, these Lend-Lease obligations of the other American Republics should be canceled as a matter of equitable treatment and in view of the inability of these Republics to pay in anything like the foreseeable future the whole or a considerable part of these Lend-Lease obligations. The Minister asked whether in his instructions to the Mexican Ambassador in Washington he could mention that I had approached the Department of State on this matter and made recommendations with respect to the Lend-Lease obligations of the American Republics. I said to the Minister that as my recommendations were a matter of record in the Department of State, I saw no reason why the Minister and the Mexican Government should not know of what recommendations I had made.

The Foreign Minister then went on to speak of the financial situation of the Mexican Government of the desire which it had shown to put its financial house in order, of the very successful action that it had taken in recent years to put its house in order. He spoke of the difficulty in raising increased revenues for the Government and of the demands of the social programs which the Mexican Government had to carry through. He reiterated that the Mexican Government had undertaken to pay the appropriate part of the amount of Lend-Lease deliveries as fixed in the Lend-Lease agreements but that presently the Mexican Government was not able to make such payments and continue to carry through its payment on other external obligations and its internal programs which were necessary to the stability and to the development of the country. I said to the Minister that I personally had, out of the very full knowledge which I had of the Mexican economy and the Mexican situation, an understanding of this situation but that I naturally could not make any observations further than that I would continue to make certain recommendations to my Government in the same sense that I had already done.

[Here follows a review of Ambassador Messersmith’s recommendations on lend-lease made to the Department in 1945 communications.]

Since I made this recommendation in the communications mentioned in this despatch that the Lend-Lease obligations of the other American Republics should be canceled, the world situation is even more somber than it was at the time. While I am one of those who still have confidence in the ultimate success of the World Security Organization I still remain one of those who believe, as I did from the outset, that the keystone of our security and defense in this hemisphere lies in the closest collaboration in the political, economic, social and defense field among the countries of this hemisphere. I also maintain that there is no inconsistency between such close collaboration between the countries of this hemisphere and a world security organization. This latter idea seems to be now definitely accepted in principle but in practice it has not yet been adequately implemented.

In the meantime, it is my understanding that the Joint Chiefs of Staff of our Armed Forces have made a very clear and definite statement to the effect that the closest collaboration among the countries of this hemisphere is the keystone of our security and defense. Among every one of the American Republics, as in our own country, there is fully understood this need for collaboration in every field including the defense field among the American Republics. If there is lack of understanding of the importance of this collaboration in every field in certain sections of Government in our country and of certain others of the American countries there is no lack of understanding of it among the people of the United States or of the other American Republics, and the world situation is so grave that under no circumstances can Governments deceive the legitimate aspirations of the people of this hemisphere with respect to the appropriate measures of our security, our defense, and our peace. It is usually necessary for Governments to lead the peoples in the molding of public opinion in matters so basic as this. It is an interesting thing that at this time, it is the peoples of the American Republics who are more advanced in their thought than certain circles in Government in some of the American Republics.

The basis of the sound conduct of foreign relations must be that of equity and understanding as well as collaboration for without equity and understanding there cannot be collaboration. It would be most unwise to conceal from ourselves that there has been a deterioration in the American picture. The basic sentiment for collaboration among the American Republics and recognition for the necessity for our leadership has never been greater. This is true among the peoples of every one of the American Republics including our own. There is, however, a certain sense of deception. There is a feeling that in the economic field we have kept in mind more the needs of other areas of the world than we have the needs of the American Republics. There is a widely-spread feeling that in economic decisions we permit ourselves to be influenced by certain internal considerations rather than those based on equity and collaboration. This applies particularly to the handling of certain commodity problems such as sugar and coffee and tin. There is the feeling that so far as the defense arrangements are concerned, we are not adequately realistic in recognizing the impoverished condition of the other American Republics for the most part, the still relative instability of their economies and, therefore, of their political structure. There is the feeling that although democratic processes are making progress in all of the American Republics we expect them to have grown up faster than is possible and do not take into account adequately political and economic and social factors which these countries in their relative measure have to struggle with day by day.

So far as Lend-Lease is concerned, the other American countries know that there was returned Lend-Lease from Britain in particular. They know that, however, for most of the countries to which Lend-Lease assistance was extended, not only in the form of military material but in the form of food and medical supplies and all sorts of materials no return of any kind has been received or will be expected. The other American countries feel that although they were not actively engaged in the war as were some of the countries which received Lend-Lease assistance that the assistance which was rendered under Lend-Lease in this hemisphere was particularly in the form of military material which was essential to give morale to their Armies and military establishments and to their people. They feel that the total amount of Lend-Lease assistance for such military material which was extended was small and really insignificant as compared with the Lend-Lease extended to other countries in more distant parts of the world. They feel that as a matter of equity they should not be asked to pay for this Lend-Lease material.

It should be borne in mind that the American Republics have not expressed this thought openly and in most cases not officially. Some of them have endeavored to meet their installments. Brazil has met her installments in considerable measure, but it will also be recalled that the overwhelming part of the total of Lend-Lease extended to the American Republics went to Brazil which received more than all of the other American Republics together. Even in the case of Brazil, although she has made these payments, I am sure that if Brazilian opinion is properly consulted it will be found that Brazil feels that the amounts which she has already paid should be refunded and that the total amount should be canceled for her as for the other American Republics. It is not a thought which Brazil would advance unofficially or officially at this time, but it would be most unwise for us not to recognize that this is the actual thought of the peoples and Governments of every one of the American Republics.

Now that the Mexican Ambassador is going to receive instructions to discuss this matter with the Department of State, this matter is coming up for consideration by our Government and will have to have it. It is for this reason that I have referred in this despatch to the previous despatches which I have written on this matter and am writing this despatch. I think that in our conversations with the Mexican Ambassador or with any other Government of the American Republics we must be most careful to avoid the implication that we are not at least considering cancellation. Any attempt to state that it is equitable to ask them to pay these obligations will be most unhappy and cause us very serious damage. I wish at this point to state that while I do not recall having discussed this matter of Lend-Lease obligations of the other American Republics with then Under Secretary Welles, I do recall a conversation with the late President Roosevelt during the course of which these Lend-Lease obligations came up and during which I stated that I thought as a matter of equity we would not in the end have to ask these Republics to repay these obligations. I do not recall the exact words of the late President Roosevelt, but I do recall in the most definite way that he dismissed the matter as one which was certain—that is in the sense that the American Republics would not be asked to repay these Lend-Lease obligations any more than we would expect repayment of the Lend-Lease obligations of the other many countries to which it had been extended. I do not refer more specifically to this conversation with the late President Roosevelt because I do not adequately definitely recall the terms in which he spoke, but I do recall his reference to our experience with the debts after the First World War and that we must avoid the unhappy consequences which grew out of some of our attitudes in that connection.

I also wish to note that the Mexican Foreign Minister, Dr. Castillo Nájera, in the memorandum which he read to me of his conversation with President Truman and Secretary Byrnes stated that both indicated that they had no knowledge of this matter. I think it is quite understandable that in view of the many occupations of the President and of the Secretary that this matter may not have been taken up with them by the appropriate officers of the Department but in view of the extreme importance of the matter, I think it is essential that full consideration in the broad light of the basic factors involved be given to the matter now. It can no longer be delayed.

We are interested in a defense pact among the other American Republics. The people of our country are interested in it. The people of every one of the American Republics are intensely interested in it. The Governments of most of the American Republics, I believe all, even the Argentine, are interested therein. The military establishments of our own country and of the American countries have shown their understanding of the need thereof. I wish to express the considered opinion that it is useless for us to think of a defense pact which will have any more meaning than a piece of paper and pious declarations if it is not supported by the most realistic attitudes in the political and economic field as well as in the defense field and this means full implementation of inter-American policy in every field. One of the fundamental factors which we have to overcome is that presently in, I believe, every one of the American Republics there has been a growing feeling and there is now almost a conviction that we as a Government are more interested in more distant parts of the world than we are in this hemisphere and that other parts of the world can expect more equitable and understanding treatment than can the countries of this hemisphere. It is obvious that this impression must be removed in the political, economic, and defense field if inter-American unity is to mean anything and to be the bulwark of security and defense and peace that we all recognize it has to be.

There are many things to be considered in the implementation of this policy, but I confine myself in this despatch to the one phase which is, in my opinion, imperative necessity of our taking action in the near future leading towards the cancellation of the Lend-Lease obligations of the American Republics. I am confident that the American people, if properly informed, will not only be in complete accord with but will applaud such action as understanding and equitable. I am confident that if the matter is brought to the attention of the Congress that there will be the most complete understanding there and that any other course will be considered inequitable and completely lacking in understanding of our primary interests. It is a matter in which, because it is a matter of relationships, the Department of State must take the initiative. The initiative does not belong in any other agency of the Government. It belongs in the Department of State and the time has now come for us to take that initiative.

What I wish to emphasize particularly is that this matter is not one which can be dealt with by technicians or by financial experts or on legal grounds. It has to be dealt with from the broad basis of national policy, national security and national interest and at the highest levels of Government. It is a decision which has to be made at the highest levels of Government and a decision in which the preliminary advice of technicians is not necessary and can only lead to hampering discussions which will in no way change the ultimate decision but such discussions can do much harm to the basic interests of our country. I have long served our Government, and I hope faithfully and constructively. It is for this reason that I bring so strongly to its attention this matter of immediate consideration and attention to the question of cancellation of Lend-Lease obligations of the American Republics. In the case of those Republics which have made small or fairly substantial payments such as Brazil, there is no reason why reimbursement in one form or another based on discussions with that country may not be made.

Respectfully yours,

George S. Messersmith

14. Signed March 27, 1942: for text, see Foreign Relations, 1942, vol. vi, p. 485.
15. Agreement of March 18, 1943; for text, see Foreign Relations, 1943, vol. vi, p. 397.