Memorandum by the Assistant Secretary of State for Inter-American Affairs (Miller) to the Under Secretary of State (Webb)


Subject: Suggested points which might be made to Mr. Gaston regarding the Mexican credit proposal.

The Department and the Eximbank have for more than a year recommended against any changes in our oil policy. During all of this time the Pemex group in Mexico has attempted to apply certain pressures.
Mr. Cortina, Commercial Counselor of the Mexican Embassy, discussed with Mr. Gaston about 2 months ago the extension of a general line of credit to Mexico as an alternative to a petroleum loan. The Mexican Ambassador, with the assistance of Cortina, has, we believe, been successful in convincing President Alemán that Mexico should withdraw its request for a petroleum loan and apply instead for a credit of 150 millions with the understanding that disbursements will be made only in accordance with the practices and policies of Eximbank.
The size of the credit is important politically to President Alemán because of the extensive publicity which the Mexican press has given to reports of a possible oil loan of from 2 to 4 hundred millions, and because of the publicity which accompanied Senator Bermudez’ visit last year. There is a real risk that if we make a counter-offer substantially less than 150 millions, or if we do not act promptly, President Alemán will withdraw his request for a credit and resume his support of the Bermudez position.
The timing is also important in view of the desire of President Alemán to make political capital of the credit in his September 1 address to the Mexican nation.
In view of these considerations, and the importance of Mexican cooperation in the crisis which we are now passing through, it is hoped that the Export-Import Bank will not delay action until it is absolutely satisfied that Mexico has a borrowing capacity for the full amount of the credit; and that, instead, the Bank make it clear to the Mexicans in an informal way, that under the circumstances it will be necessary for the Bank to examine more fully than normally the borrowing capacity factor each time a loan application is presented.