Memorandum by the Under Secretary of State (Webb)

Meeting With President, Monday, May 23, 1949

export-import bank loan to pemex

The President is very anxious that we do something to help with the problem of oil development and production in Mexico. He mentioned [Page 675] a figure of 160,000 barrels per day as a desirable level to encourage. He feels that unless something is done expeditiously the peso will lose its value and undermine the government, leading to conditions which would be highly undesirable from the standpoint of the United States. He understands the reasons why we cannot accept Mr. Crosser’s view and agrees that we cannot make a loan on an unconditional basis.

The President is anxious that we proceed as expeditiously as possible to develop a solution to this problem along the lines we are working and indicated that arrangements under which certain facilities connected with transportation and refining should be financed would probably be satisfactory.

The President expressed himself as feeling that the fastest way to get development was to have private companies provide the technical know-how and create the conditions under which they could go in and accomplish the necessary development.

James E. Webb