The Secretary of State to the Embassy in Mexico
828. Dept desires you seek early appointment with Pres Alemán to discuss Mex oil loan matter. Reurtel 104 , Sept. 4.1 You are instructed ask Pres if he and appropriate Mex Govt officials believe mutually satisfactory basis can be established for resumption interrupted loan negots considering both Mex Govt policy its petroleum resources and basic policy this Govt private capital available exploration, [Page 688] development, production under reasonable terms. You may add you have been instructed by your Govt to convey to him its hope that basis can be found agreeable to both Govts upon which loan assistance might be rendered construction refining and distribution facilities. Dept desires your initial discussion and any other discussions with Pres and other officials whom he may designate to discuss above with you be conducted on strictly informal, exploratory and confidential basis. Dept considers it essential no indication be given Mexicans in your exploratory discussions that US contemplating any change in position.
In reporting your conversation, pls note particular obstacles Mex find in accepting the US proposition presented our aide-mémoire.
Decision on whether negots will be resumed, on what basis, and where will be deferred pending receipt report your discussions, your analysis of official Mex thinking, and your recommendations.
Not printed. In it, Ambassador Thurston reported that the developments of the past 60 days associated with the inconclusive Pemex loan negotiations had impaired United States-Mexican relations. He urged that the present state of affairs, which invited recrimination and hostile propaganda, be brought to an early end and recommended that consideration be given to the idea of initiating, through the Embassy, informal exploratory discussions with President Alemán and Senator Bermudez designed to prepare a basis on which the interrupted loan negotiations might be resumed. He added that only the public support of the general proposition of a loan, given by President Truman, had prevented United States-Mexican official relations from being affected. (812.51/9–449)
At his news conference on September 1, President Truman had announced that negotiations on the Mexican oil loan would continue and that he was sure a conclusion satisfactory to both Governments would be reached (Public Papers of the Presidents of the United States: Harry S. Truman, 1949, p. 455).↩