Foreign Relations of the United States, 1955–1957, American Republics: Multilateral; Mexico; Caribbean, Volume VI

246. Memorandum of a Conversation, Department of State, Washington, August 28, 1957, 5 p.m.¹

Washington, August 28, 1957, 5 p.m.

SUBJECT

• Call of Mexican Ambassador Upon the Secretary

PARTICIPANTS

• The Secretary
• His Excellency Sr. Don Manuel Tello, Ambassador of Mexico
• Mr. William P. Snow, Acting Assistant Secretary of State for Inter-American Affairs

The Secretary received the Mexican Ambassador this afternoon at 5:00 at the latter’s request. Ambassador Tello began by speaking of the Secretary’s son and daughter-in-law, who reside in Monterrey, Mexico. He described them as highly regarded in Mexico and apparently quite happy there. He had seen them most recently at the Embassy reception given for Dr. Milton Eisenhower earlier this month.²

The Ambassador then referred to the decision in principle just reached by the United States Government to contract with his Government under Public Law 480 for the sale of a large quantity of corn. The Mexican Government wished the Secretary to know, through him, how gratified it was at this decision. He could testify that there was a serious need for the transaction because of the prolonged drought in the main agricultural areas.

The Secretary remembered that the Rockefeller Foundation, of which he had been a director, had instituted a program in Mexico to develop strains of corn better adapted to the local climate. Did this program still exist, and what was the basic problem with regard to corn production? The Ambassador replied that, although the Foundation program still existed and had contributed greatly to the improvement of corn production, nothing could withstand the effects of a serious and prolonged drought. In his own State (Zacatecas), cows were now selling for $5.00 a head (60 pesos). When you do not have water, the corn simply does not grow, he said.

The next subject discussed was lead and zinc. The Ambassador had conferred on various occasions with Mr. Rubottom, Mr. Kalijarvi and others in the Department. He realized that low world prices had hit the U.S. industry hard and that any remedy would have to be shared by countries outside. It was, in fact, a world problem, and Mexico had thought it might be desirable to take the lead in bringing together the foreign producer countries with a view to working out a system of voluntary export restrictions so that the U.S. Government would not find it necessary to impose import restrictions. Mr. Kalijarvi had told him frankly that commodity agreements between governments were not favored by the United States. The Mexican Mining Chamber representing private companies had agreed, after consulting with President Ruiz Cortines, to consider reducing their production if an international plan could be developed. The Finance Minister, Sr. Carrillo Flores, had spoken with Mr. Rubottom in Buenos Aires within the last week and had gained the impression that the United States might be in a position to consider a voluntary restriction plan if put forward by the producing countries.

The Secretary explained to Ambassador Tello that when the President had decided to support the measure before Congress calling for excise taxes on a sliding scale on lead and zinc imports, he had done so with deep reluctance. In principle, it was contrary to the President’s basic philosophy to encourage restrictions on the flow of trade but situations arose which generated intense political pressures. It had become clear to the Administration that, unless relief measures were taken very soon, there would be so much criticism of failure to act that our reciprocal trade agreements program might be impossible of extension next year when it came up for renewal. If that should happen, far greater damage would have been done than if special measures were taken in favor of our lead and zinc industry.

As for a voluntary plan, the Secretary was not certain whether it could be entered into by the United States Government, although he had not studied that aspect of the matter fully. He likewise noted that, unless practically all of the major foreign producers agreed to the plan, those not so obligated could take advantage. A third point was that if private companies rather than governments should agree to some form of shared reduction, the American companies involved might find themselves in conflict with our anti-trust laws. However, he appreciated the constructive spirit of the Mexican proposal and assumed that a voluntary plan might be worth exploring.

He expected that Congress might adjourn within a few days without having passed the sliding-scale excise bill or any other measure of the kind. In that case, the industry could be expected to invoke protection under the escape clause of the Trade Agreements Act,³ and the President was committed to request the Tariff Commission to expedite its consideration of any such petition. Thus, while the President would seek to make it as equitable and moderate as he could and while the effect of recourse to the escape clause would not be immediate, the Secretary believed it would have to be proceeded with. Whole U.S. communities would be unemployed if some of the lead and zinc mines were forced to close down. In many of these little towns, the only industry was the local mine.

The Ambassador stressed the moral advantage of a voluntary agreement, in that it would be so much easier to explain to the public in foreign producing countries like Mexico, and he hoped that the United States would be willing to entertain proposals from those countries. The conversation ended with the Secretary having listened sympathetically throughout to the Ambassador’s exposition but without having given any commitment.

1. Source: Department of State, Central Files, 611.12/8–2857. Confidential. Drafted by Snow.
2. Eisenhower visited Mexico, August 4–10, as Special Ambassador and Personal Representative of his brother, the President. He was accompanied on this trip by Assistant Secretary Rubottom. Documentation on this subject is ibid., Rubottom Files: Lot 59 D 573, Eisenhower, Milton.
3. Reference is to P.L. 86, the Trade Agreements Extension Act of 1955, enacted June 21, 1955; for text, see 69 Stat. 162.