812.51/12–1547: Airgram
The Acting Secretary of State to the Embassy in Mexico
A–918. On December 3 the Board of Directors of the Eximbank approved the following credits to Nacional Financiera under the $50 million commitment all to be guaranteed by the Mexican Government:
- (1)
- $7 million to assist in financing purchases in U.S. of railway equipment including principally rails and accessories, and also three diesel electric locomotives for National Railways; credit available until June 30, 1948, at 3–½ percent repayable in ten years beginning December 31, 1948;
- (2)
- $5 million to assist in financing purchases in U.S. of materials, equipment and services required to complete construction of the Guayalejo and Sanalona sugar mills; credit available until June 30, 1948 at 3–½percent repayable in 20 equal semiannual installments beginning six months after date of obligation; credit to be equally divided between the two mills, the interest rate charged by Financiera not to exceed 4–¼ percent for a term not less than ten years.
- For Embassy information only. Although the Department believes that economic justification for the project is doubtful and while it concurs with Embassy’s views and recommendations, Department did not press these objections since it is believed a moral commitment to finance project existed and other members of the Board favored approval of credit.
- (3)
- $1 million to assist in financing purchases in U.S. of equipment, materials and supplies required to establish in Mexico those meat canneries with which U.S. Department of Agriculture is concluding a contract for the purchase of canned beef; credit at 2–½ percent is available until April 30, 1948, is repayable in two semiannual installments, the first due six months after date of advances; interest charged by Financiera on Eximbank funds readvanced to canneries not to exceed the above rate by more than 1–½ percent.
The foregoing credits bring the aggregate total to date to $21.5 million under the $50 million commitment.
Also December 3, Bank Board denied Nordberg Manufacturing Company’s application for an advance commitment of $900,000 to assist the company in financing sale of diesel electric generating units to the Federal Electricity Commission. This negative action is based upon apparent fact that installation of these units would not serve industrial or agricultural demand and, therefore, would make little contribution to Mexican economy; also that a balance of approximately [Page 771] $3 million of the $20 million credit to the Federal Electricity Commission authorized on March 21, 1945 remains uncommitted.