Foreign Relations of the United States, 1947, The American Republics, Volume VIII

812.75/4–1447

The Under Secretary of State (Acheson) to the President of the International Telephone and Telegraph Corporation (Behn)

Washington, April 30, 1947.

My Dear Colonel Behn: I refer to your letter of March 12, 1947⁵⁰ and the letter from Mr. Francis White of April 14, 1947⁵¹ setting forth the proposals of the International Telephone and Telegraph Corporation concerning the consolidation of the two telephone companies in Mexico. I also refer to Mr. White’s letter of April 22, 1947^51a relating to his conversation with Mr. C. Tyler Wood⁵² on April 18, at which time Mr. Wood presented the views of the State Department on the above-mentioned proposals of the International Telephone and Telegraph Corporation.

The Department is unable to support your request for government financial assistance to the International Telephone and Telegraph Corporation for the acquisition of the Ericsson Telephone properties in Mexico. While the Department is still of the opinion that it cannot formally object to the sale of your telephone subsidiary in Mexico, it would nevertheless at this time take a serious view of such action.

The Department does not support the proposal that a loan be made to the Mexican Government for the purpose of financing a Mexican Government controlled mixed company.

The Department has carefully explored the possibilities of the United States Government financing of the acquisition of the Ericsson company by the International Telephone and Telegraph Corporation and, while it is unable to support that proposal, it would however support a request for financial assistance to help finance the export of equipment which might be needed for the modernization and development of the Mexican telephone system, should the International Telephone and Telegraph Corporation acquire the Ericsson company there. The Department would also be disposed to be of assistance through such good offices as it might deem appropriate.

Sincerely yours,

Dean Acheson

50. Not printed.
51. Letter of April 14 from the Vice President of IT&T (White) not printed.
52. Not printed.
52. Deputy to Assistant Secretary of State Clayton. The Department’s views, as set forth by Mr. Wood in a memorandum of April 21 to Under Secretary Acheson, not printed, were that the Export-Import Bank, under its charter, could not help IT&T in financing the purchase of the competing company, but it might be possible to have the Eximbank assist IT&T in financing the provision of the equipment to the Mexican Telephone Company if IT&T could itself arrange to finance the acquisition of the competing company; by no other means, apparently, could this Government give assistance to IT&T (812.75/4–2147).