Memorandum of Conversation, by the Director of the Office of Financial and Development Policy (Stinebower)


Subject: Pemex Loan

Participants: Mr. Herbert Gaston, President, Export-Import Bank
Mr. Willard Thorp, Assistant Secretary of State

Mr. Thorp reported that Mr. Webb had strongly presented to the President the case against a Pemex loan with no success, and that the President had indicated it was his view that such a loan should be made. Mr. Gaston indicated that he was already aware of the general outcome of the discussion, and said that if such a decision was to be a matter of high administration policy, he wished to hear it directly from a representative of the White House.

Mr. Gaston indicated his strong disagreement with the decision, and said he wanted to point out to the White House, as he had already done the day before to Senator Kefauver,1 the inevitable results of such a decision—namely, that a number of Latin American countries, including Bolivia, Brazil, Colombia, as well as other countries such as Turkey, would promptly apply to the Bank for similar loans for petroleum development. Mr. Gaston thought this was contrary to the Bank’s established policy of working with private capital and leaving to private capital fields which such capital would finance.

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Mr. Gaston inquired if there were any details as to the precise character of the transaction which the President had in mind, to which Mr. Thorp replied in the negative.2

  1. Estes Kefauver of Tennessee.
  2. In a letter of July 17 to Horace H. Braun of the Embassy in Mexico, Robert H. S. Eakens, Chief of the Petroleum Policy Staff, said in part: “In regard to the Mexican oil loan, it has appeared from time to time that it would be approved by the White House at almost anytime, for the indications that We received continued to be to the effect that the White House wanted a loan made. At a meeting at the White House on June 23, however, according to the reports that I have had, the President simply emphasized that he wanted to make his view known to the Bank. It was left at the meeting that the Bank would re-study the matter. I have not seen any results as yet of that action.” (812.2553/7–1750)