352. Memorandum of Conversation1
SUBJECT
- President Johnson’s Conversation with President-elect Diaz Ordaz
PARTICIPANTS
- The President
- President-elect Diaz Ordaz
- Antonio Carrillo Flores, Ambassador of Mexico
- Thomas C. Mann, Assistant Secretary
- Angier B. Duke, Chief of Protocol
- Robert M. Sayre, White House staff
- Donald Barnes, Interpreter
The President outlined his economic philosophy. He emphasized especially the need to maintain the confidence of investors. He observed that investors have to feel secure and have no fear that their investments will not be destroyed or confiscated by the government. The United States was now in its 45th month of unbroken economic growth. The President felt that investors’ confidence was a major factor in setting this record. He regarded a high level of investment as basic. Without it, plants would not be built, nor jobs created. He was not disturbed at a high level of profit. On the contrary, he welcomed it because the government got 52¢ out of each dollar of profit. The greater the profits of business, the more government received to carry on essential programs.
Diaz Ordaz expressed general agreement with this philosophy, but he said Mexico had a special problem which could not be resolved by guaranteeing the security of investment. This problem was the extent to which the Mexican economy was dependent on actions of the United States Government. He then discussed cotton (threat of variable subsidy); sugar (no assured quota); coffee (no U.S. legislation implementing the International Coffee Agreement); silver (U.S. stocks could upset the market); lead and zinc (stagnation in industry because of over supply); fluoride (tariff barriers), etc.
Diaz Ordaz said Mexico needed long term assurances on its primary products so it could do long term planning. He said that Mexico had always found great comprehension in the United States. But he regarded this as an “act of grace,” by the United States.
(Mr. Sayre asked the Mexican Ambassador later if this did not amount to a suggestion for a trade agreement. The Ambassador said it probably did, but a bilateral agreement and not participation in GATT. Mexico found no merit in joining GATT.)
Diaz Ordaz said the President could expect any Mexican Ambassador to be persistent, because it needed cooperation on its primary products to avoid a very serious situation.
The President said he understood this problem. He was certain that the Mexican President-elect understood the political problems of the United States on importing primary products because they were not different from the problems the President-elect would face. The President said he would like to be helpful on, for example, sugar. But when he agreed on a foreign quota, he had to hold down the domestic quota. [Page 746] The inevitable result was that farmers who could vote in the United States asked why Mexicans who do not even live in the United States got quotas and American farmers did not. Sugar is now grown in 22 states and the Senators from these states are, of course, pressing for increased domestic quotas.
The President said he knew that the Coffee Agreement was essential. He noted the problem of only having coffee consumers in the United States and no producers interested in market stability. But he assured the Mexican President-elect that he would seek action on coffee. He observed that it would be very difficult to get good legislation, but in doing so we would show our real friendship for Latin America.
Diaz Ordaz said he understood the situation perfectly. He regarded these problems as trade matters and hoped they would be dealt with as trade problems and not political problems. He thought that relations would be stronger if Mexico did not have to depend on loans or special legislation by the United States Congress.
The President said he could not agree that loans adversely affected relations. He recalled his own personal experience in borrowing money from a friend when his friend had reason to doubt that he would ever be repaid. The President considered the lender as one of his best friends and still did today. He thought that loans on special terms were helpful.
Diaz Ordaz said there were two urgent problems:
1. Colorado River Salinity
He said that he knew we had reached agreement in principle and that only a few details remained to be worked out.
Diaz Ordaz said he could not agree with the United States that it had no obligations as to quality merely because it is not mentioned in the Treaty. He thought the United States had an obligation to act responsibly. He was confident that the International Court would hold that the water users on the right bank of the river were entitled to the same quality of water as those on the left bank. He thought the problem could be settled in the near future if the Boundary Commission had instructions to do so.
The President said that the United States Boundary Commissioner had such instructions. He observed that Commissioner Friedkin was one of the most competent persons he had working for him and knew he would do a good job. He said he could not accept the legal viewpoint, which Diaz Ordaz had outlined, but that Diaz Ordaz could be assured that the United States would do the right thing.
The President referred to the salinity problem on the Rio Grande, which was so injurious to farmers in the United States. Diaz Ordaz said that Mexico is ready to do what is necessary to solve this problem on [Page 747] the basis of the same principle he proposed for solution of the Colorado River problem.
2. Migratory Workers (Braceros)
PL–78 had not been extended.2 But he expressed concern that the situation which existed before the agreement would recur. He said Mexico would not ask for extensions of the agreement or the hiring of Mexican workers. He wanted the United States to prevent illegal entries and improper recruiting activities. He wanted to be assured that any Mexicans brought in on private contracts were properly treated.
The President said that both Mexican and United States labor unions had opposed PL–78. The Secretary of Labor was making a concerted effort to find workers in the United States. If this effort did not prove successful, then he thought the United States and Mexico should enter into a new agreement. He urged that such an agreement be simple and avoid the bureaucratic red tape which plagued the existing program.
At 11:45 a.m. the meeting ended and the President and President-elect departed for a tour of the Ranch.
- Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL MEX–US. Confidential. Drafted by Sayre. Approved in the White House on December 10. The memorandum is part I of II. Part II recorded discussion on November 12 on Mexican-Cuban relations. (Johnson Library, National Security File, Country File, Mexico, Diaz Ordaz Visit, 11/12–11/13/64)↩
- See footnote 4, Document 346.↩