812.24/11–1947
The Secretary of State to the Embassy in Mexico
No. 1585
Sir: I refer to the Department’s airgram no. A–305 dated April 10, 1947,12 concerning modification of the terms of repayment to the United States Government by the Government of the United Mexican States of obligations incurred under the Lend-Lease Agreement of March 18, 1943, and to conversations of recent date between officers of the Department and yourself on the same subject.
It was agreed in the discussions referred to that conversations leading to the revision of the payment in terms embodied in the exchange of notes accompanying that agreement could best be held in Mexico. Accordingly, you are requested to approach the Mexican Government [Page 749] and proceed with revision of the payment terms through an exchange of notes on the basis outlined in the attached draft note to the Mexican Ministry of Foreign Affairs.13
For your information, the sum now due from the Mexican Government under the present terms of the above-mentioned exchange of notes is $8,800,000. An additional sum is scheduled to become due January 1, 1948. According to the latest reports of the lend-lease fiscal authorities (Statement LL–12), this will be $957,000, making a grand total of $9,757,000. This sum represents 33 per cent of lend-lease charges reported through December 31, 1946 of $29,566,805.27. It is not final since reporting and auditing of lend-lease accounts has not yet been completed.
The Mexican Embassy in Washington was informed of the sum now due in a note dated March 24, 1947, a copy of which was transmitted to the Embassy under cover of instruction no. 971 dated March 28, 1947.14
The undetermined amount of the final payments specified in paragraph B of the draft note is due to the fact that reports of lend-lease charges are not yet final. Charges and credits in connection with lend-lease transfers effected during the past several years are still being reported to the Treasury Department fiscal authorities by the United States procuring agencies. Consequently the net bill is likely to be somewhat higher than the total of $9,757,000 mentioned above, or it may possibly be somewhat lower. This point should be made clear to the Mexican Government. In the event that the indeterminate amount of the final payments should prove an obstacle to the success of your negotiations, however, the Department would consider an agreed total, if it should be proposed by the Mexicans.
The draft note attached of course is not intended to be absolutely final in respect to specific language. Any substantial revision of the proposed terms, however, except the substitution of alternate paragraph C concerning interest charges, should be referred to the Department for clearance. There is no chance that a proposal for reduction of the 33 percent payment originally specified would be accepted.
The proposed exchange of notes should be Confidential, as it is felt that publicity regarding this matter might seriously jeopardize prompt collections of sums due from other countries. You may inform the Mexicans accordingly at your discretion.
Very truly yours,
Director, Office of Financial and Development Policy
- Not printed; the Department indicated that it was then giving further serious consideration to revision of the terms of lend-lease payment to permit part payment in real estate or local currency for the Division of Foreign Buildings Operations program (812.24/3–1147).↩
- Not printed.↩
- Neither printed.↩