812.6363/3122: Telegram
The Ambassador in Mexico (Daniels) to the Secretary of State
[Received March 23—1:25 a.m.]
68. I called on President today accompanied by Boal. Beteta present. With reference to your telephone call I stressed your surprise and concern over action taken in respect to American Petroleum interests; developments have been a cause of embarrassment to our Government in view of cooperation with Mexico at Buenos Aires and Montevideo. President expressed appreciation friendly attitude of our Government and mentioned his concern at possible effect of oil controversy on friendship with democratic nations.
In mentioning events that led up to decision President cited the alleged rebellious attitude of the companies and their injurious attitude and actions toward the Government.
The President indicated Government’s sincere intention of proceeding immediately to begin offering compensation through allotment to them of a share in oil produced. This share apparently not as yet determined could be sold by the companies wherever they pleased. [Page 734] Discussions of the values of properties expropriated probably lasting a long time could concurrently take place, the share of oil received in the meanwhile to be credited ultimately in the final settlement.
In reply to my question as to whether this would prejudice companies’ recourse to legal remedies President answered that companies would retain all legal rights and Government would have no objection or adverse feeling if they took legal action.
President expected oil production to continue without reduction and in reply to a further question of mine as to where the Government proposed to sell the oil the President indicated his desire to avoid possibility of oil reaching countries with which Government was not politically in sympathy. President indicated he would be willing to enter into a sales agreement with the United States or Great Britain and would be glad to make long term arrangements reserving such part of Mexican production for United States as it might desire.
Again reverting to events leading up to expropriation decree President indicated that no other course had been left open to him and that he hoped compensation arrangements could be worked out. In closing President mentioned his regret that a situation had arisen during his term which had caused embarrassment to our Government.
Complete report by air mail85 follows tomorrow.
- Despatch No. 6318, March 22, not printed.↩