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

No. 1403

Sir: On June 24 last, Senator Antonio J. Bermúdez, Director General of Petróleos Mexicanos, the Mexican state petroleum trust, spontaneously addressed a letter to me in which he transcribed the following text of an invitation he had sent on June 18 to the Honorable Charles A. Wolverton in his capacity as ranking member and Chairman of the Interstate and Foreign Commerce Committee of the United States House of Representatives: “Petróleos Mexicanos would consider it a great honor if you and the honorable members of your Committee would visit Mexico as our guests in order to see our oil fields and make a survey of our oil resources and industry, and thus realize the necessity of quick development. Believe your visit would greatly strengthen your ideas regarding economic ties between our two countries. [Page 607] Your visit would make clear to you needed action. You are most welcome. Kindly let me know your decision.”

Senator Bermúdez likewise transcribed in the letter just cited the text of the reply he received on June 24 from Mr. Wolverton, in the following terms: “This is to acknowledge your very kind invitation for the Committee on Interstate and Foreign Commerce to visit Mexico for study and survey of petroleum fields and related economy. The Committee accepts with pleasure your invitation and will advise with respect to a definite date, which will probably be on or about July 26.”

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In so far as I have been able to ascertain, the invitation was extended because of Senator Bermúdez’ awareness of the important part played by this Committee in the study of petroleum as a domestic and international problem and because of the attitude of the Committee toward the matter reflected in its activities and in public statements of its members.

The visit of the Committee was postponed from the date tentatively set by Mr. Wolverton in his reply to Senator Bermúdez because of the holding of the recent Special Session of our Congress, and the Committee did not arrive in Mexico City until August 18. Elaborate preparations had been made for the visit by Petróleos Mexicanos, whose fourteen-day program of study and entertainment includes visits to the southern, central, and northern oil areas, a special session by the Mexican Congress, several official receptions, and a conference with President Alemán. The Committee itself includes fifteen members of the Interstate and Foreign Commerce Committee as well as three members of the Committee staff, a Lieutenant Colonel representing the Department of National Defense, and an officer of the Department of State. It was brought to Mexico in United States Army airplanes.

Upon the arrival of the Committee, most of its members were taken at once on a tour of the oil areas while a smaller group remained behind, principally for the purpose of conferring with me and members of my staff. A meeting of several hours duration took place August nineteenth in my office, at which the principal officers of the Embassy were present and in the course of which I recited major developments in the history of Mexico’s oil industry from its commercial inception to date, pointing out in particular that under instructions from our Government my predecessor had for some time carried on informal conversations with the highest Mexican authorities, looking to an arrangement whereby foreign petroleum companies might again participate in the development of Mexico’s oil resources; that immediately following the inauguration of President Alemán I had [Page 608] resumed these conversations; that in the course of all representations made to the Mexican authorities, we had made it abundantly clear that the United States Government has never entertained any desire to interfere in any way with the freedom of the Mexican Government to determine its own oil policy, and has always been fully cognizant of the sovereign rights of Mexico in this respect; that any arrangements which the Mexican Government might wish to enter into with American and foreign companies must hold some reasonable prospect of being attractive to them; that our belief was that not only considerations of hemisphere defense, which rests primarily upon the United States of America, but those of Mexico’s internal economic development and the general peacetime needs of the world call for the development of this country’s petroleum resources; that developments in this field in Mexico were being observed by several other American republics possessing developed and undeveloped petroleum resources, whose decisions with respect to nationalistic policies or free enterprise, whereunder American and foreign capital might be utilized, would be affected by the solution found for Mexico’s pressing problem; and lastly, that our approach to our conversations with Mexico had been based upon the belief that where private capital and enterprise stood ready to enter the field, the public funds of the United States should not be employed.

Upon the return of the principal part of the Committee, headed by Mr. Wolverton, a further extended meeting was held in my office at which time I went over the same ground, more fully and more frankly. In answer to the question what in my opinion was the reason for the invitation extended to the Committee to come to Mexico, I replied that I felt quite certain that it was in order that the Committee might perceive the magnitude of the problem confronting Pemex and Mexico and be won over to the Mexican point of view that the development of Mexico’s oil resources should be carried out through Pemex, and that the United States should facilitate the execution of this undertaking by making available or causing to be made available the material and probably the funds required.

In order that the members of the Committee might have the benefit of as wide a range of opinion on all subjects connected with their mission as was possible, I arranged for interviews by the Committee members with representatives in this city of American oil companies and with several of the principal Americans engaged in other activities here. I felt that the Committee should be given the benefit of the information and experience of these representative Americans so that it might be weighed together with the intense propaganda being directed toward the Committee by Pemex, and with the data and opinions [Page 609] furnished by the Embassy. Further developments will be reported in subsequent despatches.

Respectfully yours,

Walter Thurston