812.75/12–2247
The Acting Secretary of State to the Secretary of Defense (Forrestal)
My Dear Mr. Secretary: On November 4, 1947, representatives of the International Telephone and Telegraph Corporation met with Department officials to discuss the problem now confronting the I.T.&T. in connection with its majority-owned Mexican subsidiary, the Mexican Telephone and Telegraph Company. As a result of that meeting, and at the Department’s request, the I.T.&T. prepared a memorandum on the Mexican telephone situation and delivered it to the Department on November 24, 1947. A copy of that memorandum is enclosed.54
As indicated in the enclosure, the Department is now being requested to sponsor a government loan to effect the purchase for American or Mexican interests of the two telephone companies now operating in Mexico, or to declare that it would have no objection to a sale by the International Telephone and Telegraph Corporation of its holdings in the American Mexican Company to the L. M. Ericsson Company, a Swedish corporation, in the manner and under the circumstances as outlined in the enclosed memorandum.
Before taking a position in this matter, the Department would appreciate having the views of your Department on the security features [Page 772] which might be involved were the sale to be consummated along the lines as stated in the enclosed memorandum.55
Sincerely yours,
Assistant Secretary
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In his reply, of January 2, 1948, Secretary Forrestal stated as follows: “I can see no security problems involved in the consummation of the sale of the telephone companies in Mexico, as outlined in the enclosure to your letter.” (812.75/1–248) Under Secretary of State Lovett reported to Colonel Behn in a letter of January 20, 1948, that the Department would interpose no objection to the sale by IT&T of its holdings in the Mexican Telephone and Telegraph Company to foreign interests (812.75/11–1947).
The Assistant Secretary of State for American Republic Affairs (Miller) informed the Director of the Office of Middle American Affairs (Reveley), in a memorandum of December 13, 1949, that Colonel Behn had called him from New York to say that an agreement had been reached in principle with reference to the consolidation of the two telephone companies in Mexico providing for operation of the properties on a joint basis, subject to approval of the Mexican Government (812.75/12–1349).
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