812.659/70

Memorandum of Telephone Conversation, by the Acting Chief of the Foreign Funds Control Division (Meltzer)

Mr. Hammett48 called to inform the Department that the American Cyanamid Company had decided to withdraw from the proposed contract [Page 507] with the Mexican Government under which Cyanamid would take over the management of the vested drug and chemical companies in Mexico. He stated that this decision was the result of newspaper articles indicating that the various agencies in Washington were not in agreement that the deal should be approved. He mentioned in particular a news item in the New York Herald Tribune which stated that President Roosevelt had been asked to arbitrate a dispute between the State Department on the one side and the Board of Economic Warfare and the Alien Property Custodian on the other as to whether the vested companies should be taken over and operated by American Cyanamid as a practical monopoly.

He continued that the company didn’t have confidence in undertaking the management contract under the circumstances, although it felt that the opposition in certain Government agencies was not a reflection on the company but rather that there was a conflict of opinion as to the desirability of the whole project. As an example he referred to the conflict on the question of trade-marks, saying that it seemed obvious to Cyanamid that the trade-marks should be utilized from the viewpoint of the business in Mexico. He added, however, that the company had been advised that objection had been made to one of the trade-marks being purchased by an American company and that that company had had to spend a great deal of money to establish a new mark.

He stated that the company felt that going forward with the deal would be bad both for the Cyanamid company and for the Mexicans.

Mr. Meltzer replied that there were several things in Mr. Hammett’s statement that he would like to comment on. The first was the trademark policy which is one of the more complex problems. He indicated that the only thing that has been agreed on in Washington so far is that, although certain general objectives could be established, these would have to be adjusted so as to meet the requirements of specific cases; that it was recognized here that the attitude of the local Government might in many cases prevent withdrawal of the marks. He added that he didn’t know who had pretended to speak for the Government on the trade-mark policy or what specific company Cyanamid had in mind. He pointed out that there were several companies which have been subject to certain disabilities in connection with consent decrees entered into at a time when the picture in Latin America was quite different from what it is now.

Mr. Meltzer stated that all he could say about the general situation was that he would take up the matter of Cyanamid’s withdrawal with the other interested people.

He inquired whether Cyanamid was planning to get in touch with the Mexicans. Mr. Hammett replied that Cyanamid felt that it must [Page 508] inform the Mexican Government. He added that he didn’t think that the decision that Cyanamid had made was different from the decision that the Mexicans would want since if Cyanamid couldn’t go into the deal with confidence it was better from the standpoint of the Mexicans as well that Cyanamid withdraw completely.

Mr. Meltzer inquired whether it would be possible to hold off informing the Mexicans for a few days. Mr. Hammett replied that he could see no reason why that wouldn’t be all right. He added, however, that if Mr. Garfías should get in touch with Cyanamid, it would be necessary to answer any direct questions which he might ask.

Mr. Meltzer observed that it was unfortunate that Cyanamid had gotten its ideas of the government’s attitude from newspapers accounts. Mr. Hammett pointed out that the Cyanamid position was not based entirely on newspaper articles. He said that Cyanamid realized that newspaper reports do not necessarily reflect facts exactly but, on the other hand, there is generally some factual basis for them.

Mr. Meltzer stated in conclusion that he would call Mr. Hammett within the next few days.

Bernard Meltzer
  1. J. C. Hammett, vice president of the American Cyanamid Company.