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

No. 602

Sir: I refer to your despatch No. 1167, dated September 12, 1946,18 concerning the possibility of applying Mexico’s lend-lease obligation to the purchase of property and construction of buildings for the American Embassy in Mexico City, and to Ambassador Messersmith’s despatch No. 29319, dated May 2, 1946, from Mexico, on the general subject of the Mexican lend-lease obligation.

It is the established policy of the United States Government to continue to require payment in full of sums due on account under the lend-lease agreements with the American republics. This is a definite policy which has been specifically reaffirmed and is not being considered for revision. It applies and will continue to apply in the case of Mexico.

In regard to Ambassador Messersmith’s despatch concerning the Mexicans’ contention that they would not be expected to pay, a thorough investigation of the Department files has revealed no evidence in support of this contention. Mr. Sumner Welles, the former Undersecretary, and others who participated in the negotiation of the [Page 987] Agreement have been asked about this and have recalled no statements of any kind on the United States side implying that payment would not be required. In fact there would seem to have been no point whatever in specifying that payments would be required if such was not the intent since the Agreement was not made public. Officials of this Department discussed the subject with the Mexican Ambassador in May of this year and informed him that Mr. Welles could recall no commitment for cancellation of the Mexican obligation and that our policy continues to be collection of sums due. This position was affirmed in a letter dated July 2, 1946, to the Mexican Ambassador from Assistant Secretary Braden.

In view of the established policy, which is considered to be based on entirely valid grounds, the Department cannot consider at this time the suggestion that the Mexican lend-lease obligation should be reduced from the sum specified by the Agreement.

The Department is now exploring the possibility of allowing the Mexican Government to meet its obligation through the furnishing of real property and improvements of equivalent value for the foreign buildings program, as suggested in the reference despatch. Since no decision in respect to this suggestion has been reached, however, it would not be advisable to approach the Mexican Government in any way on this matter at the present time.

For your information in this connection, Mexico is required by the Agreement to pay 33 per cent of the cost of arms and armaments delivered under lend-lease, payments being scheduled over a period of years. The sum of $6,600,000 is now due. Lend-lease agreements with the other American republics include similar provisions for reimbursement. The great majority of the other republics have paid sums due in part or in full, and in no case has an obligation been scaled down in any way. The few countries which have not paid, with the exception of Mexico, have declared their firm intention to pay when they are able to. It is believed that renegotiation of the Mexican obligation would open the United States to legitimate requests for renegotiation of any other outstanding obligations anywhere in Latin America or elsewhere in the world. This Department knows of no reason why the Mexican Government would be unable to liquidate its lend-lease obligation within a short period of time.19

Very truly yours,

For the Secretary of State:
Spruille Braden
  1. Not printed.
  2. In a memorandum of December 14, 1946, sent to the American Embassy in Mexico on December 16, the Minister of Finance and Public Credit, Ramón Beteta, indicated that the Government of Mexico was disposed to negotiate with the United States Government an equitable arrangement for the liquidation of the credits extended to his country during the war in accordance with the agreement concluded on lend-lease on March 18, 1943. (812.24/1–1747)