Memorandum by the Director of the Office of Middle American Affairs (Mann) to the Under Secretary of State (Webb)
Subject: Meeting with the President with respect to the proposed Pemex loan.1
The attached memorandum for the President outlines for the President the general proposition you submitted to Mr. Murphy this week. It indicates the relationship of the proposed loan to the Mexican political situation; the economic objections to the loan; and presents in general terms the irrigation project alternative.
It is strongly recommended that the proposition put before the President does not include a proposal that Secretary Snyder2 inquire of President Alemàn whether he wishes an irrigation loan rather than a credit to Pemex. It is the Department’s judgment that the Mexican Government would undoubtedly ask for a large Pemex credit with the expectation that they would not use all of the petroleum credit and would be able also to get an irrigation loan.
With regard to the specific proposal that Secretary Snyder convey this Government’s decision to President Alemàn, if the President decides to send a personal emissary to Mexico, our latest thought is that George Elsey might be particularly qualified for such a mission because he is on the President’s personal staff. Also, it would seem more appropriate from the political standpoint that the emissary not be someone of Cabinet rank.
If the president is agreeable to the proposal set forth in the attached memorandum, it should be made clear that further consultation in the Government is necessary before this decision is conveyed to the Mexicans, specifically, approval by the Export Import Bank and the National Advisory Council of the initial irrigation loan application.3[Page 951]
- An unsigned marginal note on this memorandum reads: “Memo supposedly left at White House by Mr. Webb May 27th.”↩
- John W. Snyder, Secretary of the Treasury.↩
- In a
memorandum to Mr. Webb of May 4, apparently intended to brief
the Under Secretary for a discussion of the Pemex question with
the President, Mr. Mann had stated in part:
“1. The Department is opposed under present circumstances to making any loan to Mexico for any phase of its petroleum industry and this view is shared by the Export-Import Bank. However, if the President decides that a loan should be made, this Department will, of course, cooperate fully with the White House in every respect. It will, however, be necessary for the White House to issue direct instructions to the Export-Import Bank since the Export-Import Bank objects violently to any efforts on the part of the Department to influence its loan policy.
2. The reason for the change in the Department’s position since last July is that today the great problem in the petroleum industry is the oversupply situation. Furthermore, Mexico has made no effort whatever to comply with our suggestions of last July as to further contracts for wildcatting.
3. The other big factor in considering this problem is that Mexico has nearly reached the limit of its borrowing capacity.” (812.10/5–450)↩
- An undated copy of this memorandum found in Mr. Elsey’s papers bears the following unsigned, handwritten notation: “Pres. rejected this Sat. 27 May & told Webb he definitely wanted an oil loan.” (Harry S. Truman Library, Papers of George M. Elsey)↩