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


58. ReDepgram A–45 of January 14. This Embassy strongly recommends the Dept’s support of application of Aeronautical Radio de [Page 999] Mexico for line of credit of 3 million dollars to be extended by Eximbank. Aeronautical Radio de Mexico now has experimental concession from Mexican Govt, valid 5 years with indefinite extension if company successful. Leading airlines in Mexico have joined company as members assuming support of all leading airlines. Believe success of company important to US for following reasons:

Aeronautical Radio will assure use of American equipment and techniques in operation of airline communication system, traffic control tower operations, and airway navigational aids. This is of extreme importance in preventing non-American systems to be introduced and tends to aid our standardization program.
The use of American equipment and techniques will add to the safety of all airline operations in Mexico including American international carriers.
The standardization will tend to be of benefit as a matter of national defense, as communication engineers, control tower operations and airway technicians will all be trained in American methods.
Aeronautical Radio de Mexico will probably serve as a model for other similar organizations in the other American Republics and possibly in non-American countries.

This would be of great value to US in introducing American equipment and techniques.

Believe principal argument for granting of loan to be on national policy level but also feel that the loan is also reasonably sound from commercial viewpoint. While concession lasts only 5 years, there is no particular reason to believe that it will not be extended. Also while loan is of a 7-year duration and some of the equipment may become obsolete in 5 years and should be replaced by more modern equipment, this will apply to only a fraction of the total equipment installed and as the loan is to be repaid in quarterly installments throughout the life of the loan, the major portion of the loan will be repaid before 5 years. It is unlikely that individual companies will withdraw from cooperative agreement as cost of supplying individual facilities will exceed the cost of using the facilities provided by Aeronautical Radio. Those companies which already have part of the facilities needed are turning them over to Aeronautical Radio and so would be put to great expense to duplicate these facilities if they should decide to withdraw in the future.42

  1. Secretary Byrnes informed Ambassador Messersmith in telegram 148, February 15, 8 p.m., that the application of Aeronautical Radio de Mexico had been approved February 13 by the Board of Directors of Eximbank with two conditions (812.51/2–1546). According to despatch 29,174, April 12, from Mexico City, those conditions had been fulfilled: Aeronautical Radio de Mexico had succeeded in getting the Government of Mexico to increase the term of its permit from 5 to 10 years, and all member companies had agreed to continue to make use of the services of Aeronautical Radio de Mexico and to share in the expenses thereof according to such agreement until such loan was fully paid (812.51/4–1246).