812.659/95

The Ambassador in Mexico (Messersmith) to the Secretary of State

[Extracts]
No. 12148

Sir: In continuation of the Ambassador’s despatch No. 11442 of July 13, 1943,61 concerning the above subject, and with particular reference to the Department’s telegram No. 1259 of August 5, 2 p.m.,61 informing the Embassy that Mr. Morrison G. Tucker, Assistant to the Alien Property Custodian, was due to arrive in Mexico City on August 8, I have the honor to inform the Department that immediately upon the arrival of Mr. Tucker the whole subject was thoroughly gone over with him, and the memorandum which he brought with him from Washington was given careful consideration by the Ambassador and the Counselor of Embassy for Economic Affairs. In these discussions, it was found that some of the features of this [Page 519] memorandum would surely be unacceptable to the Mexican Government, and it was accordingly decided to prepare a memorandum with certain changes which could be left with the Minister of Foreign Relations and which, it was felt, would be acceptable in the main to both governments and, also, practicable in operation.

A copy of the memorandum as prepared and as submitted to the Minister of Foreign Relations is attached hereto.…

. . . . . . . . . . . . . .

Respectfully yours,

For the Ambassador
Thomas H. Lockett

Counselor of Embassy for Economic Affairs
[Enclosure]

Memorandum by the American Ambassador in Mexico (Messersmith) to the Mexican Minister for Foreign Affairs (Padilla)

President Roosevelt, in his letter of June 24, 1943, to President Avila Camacho, expressed his desire to extend all possible assistance to the Mexican Government in its program of utilizing certain former German companies for the further development within Mexico of the chemical, pharmaceutical, dye and allied industries. President Roosevelt’s letter also expressed his willingness to have placed at the disposition of the Mexican Government the facilities of certain companies under the control of Mr. Leo T. Crowley, Alien Property Custodian of the United States, with a view of aiding the Mexican Government in its program and to facilitating the training of Mexican technicians and, also, to increasing the supplies of products necessary to the Mexican economy.

In acknowledging President Roosevelt’s letter, President Avila Camacho stated62 that he welcomed any contribution which would result in a collaboration of mutual benefit and that Mr. Crowley, or, one of his associates, would be received informally in Mexico to discuss more fully any suggestions which Mr. Crowley might make. In accordance with this exchange of communications, Mr. Crowley has designated Mr. Morrison G. Tucker to come to Mexico as his representative.

In Embassy Note number 1438 of July 3, 1943,63 submitting President Roosevelt’s communication, the Ambassador of the United States outlined a possible approach to the problem of the Mexican Government as suggested by the Alien Property Custodian. Since the transmission of this suggestion, the Alien Property Custodian and other [Page 520] Agencies of our Government have given further and careful consideration to all possible measures of assistance and cooperation which would be in line with the traditional policies of the Mexican Government and which would accomplish the ends which the Mexican Government has in mind with respect to its domestic chemical and pharmaceutical industries.

Bearing in mind the best interests of the two Governments, the Alien Property Custodian and other Agencies of the United States Government believe that maximum benefits may be obtained for Mexico under a plan such as herein suggested, which would draw upon the technical and supply resources not only of the chemical concerns controlled by the Custodian, but also of other private United States enterprises. Accordingly, the following plan is submitted for the consideration of the Mexican Government as a basis for further discussion. As will be readily discerned, the plan is not complicated, but is essentially simple. It leaves the decision to the Mexican Government or an Agency thereof as to what services it may desire from companies under the jurisdiction of the Custodian or from other private companies whose facilities may be beneficial to the success of the Mexican program.

The plan proposed is as follows:

1.
—It is suggested that the Mexican Government organize a Company for the purpose of holding the former German equity and credit interests in certain vested concerns engaged in the pharmaceutical and chemical field. The holding of the stock and other interests in these vested companies would give the Mexican Holding Company full control while leaving each individual vested concern separate as to its assets and operating management, if so desired. By maintaining each vested concern as a separate entity, instead of combining the assets of all vested concerns into a whole, individual United States companies could make separate contracts with individual vested enterprises. It will be noted in Item 3 that the plan herein suggested provides for separate contracts or agreements between related Mexican and United States companies or groups of companies. It is suggested that the directorate of the Mexican Holding Company be small and be made responsible to the President of the Republic or to the Junta Intersecretarial.
2.
—It is further suggested that a Joint Commission be appointed to be composed of five members. Three members of this Commission should be chosen from the directorate of the Mexican Holding Company, the president of the Mexican Holding Company serving as chairman of the Joint Commission. The two United States members of the Commission should be named by the Alien Property Custodian. This Joint Commission would act in a liaison and advisory capacity to the Mexican Holding Company and to the Alien Property Custodian. It would advise as to which companies, both Mexican and United States, should be included in any agreements or contracts and, also, as to what provisions and terms the contracts and agreements should contain.
3.
—The Alien Property Custodian controls a number of chemical and pharmaceutical concerns which manufacture many of the products which have been distributed in Mexico by concerns now vested by the Mexican Government. Such concerns under the control of the Custodian would be in a position to make separate and favorable contracts or agreements with corresponding concerns vested by the Mexican Government. These separate contracts or agreements in some instances might only provide that the United States company will supply the Mexican company with products which it requires for domestic distribution and sale. In the case of another Mexican company, the contract might require not only the supplying of United States products, but, also, technical assistance. Still another intervened company might not only require a source of supply and technical aid, but, also managerial assistance. Furthermore, there is a group of vested companies whose primary function is to distribute products throughout the Republic of Mexico and this group might need the experience and assistance of experts from large United States distributing organizations. The main point is that the Mexican Holding Company would choose the type of assistance which each individual vested company or group of companies might require. The request for this assistance would be transmitted to the Alien Property Custodian through the Joint Commission, and the Alien Property Custodian would recommend the company or companies under his jurisdiction best fitted to give the assistance required by the Mexican Holding Company. Should the Alien Property Custodian find that no company under his jurisdiction was adequately equipped to perform the services requested by the Mexican Holding Company, then, he would solicit the cooperation of other independent United States companies whose experience, skill and organization would most efficiently meet the requirements. Thus, the Alien Property Custodian would plan to draw not only upon the resources and skill of companies under his jurisdiction, out, also, upon United States industry in general. It is envisioned that the contracts or agreements to be made with the vested Mexican companies would not have the Alien Property Custodian as a party thereto, but, the individual companies under his jurisdiction or other private companies desiring to participate.
4.
—It is important to point out that the Alien Property Custodian, Mr. Leo T. Crowley, is also the Director of the Office of Economic Warfare.64 This latter Agency is the licensing authority for exports from the United States and, therefore, Mr. Crowley is in a favorable position to facilitate the necessary supply arrangements within the limits imposed by the joint war effort of our two Republics.
5.
—By means of the Joint Commission the Mexican Holding Company could make known to the Alien Property Custodian its desire for the establishment or creation of new or additional facilities essential to the healthy development and expansion of the pharmaceutical and chemical industries in Mexico. The Alien Property Custodian would use his best efforts to assist the Mexican Holding Company in these respects.
6.
—With reference to the former German trademarks, it is suggested that they gradually be retired from active use by the vested companies and that new trademarks be instituted. During the period while the new trademarks are being established in the market, they would be used in conjunction with the old German trademarks, the latter being withdrawn as the new trademarks become known. Other aspects of the trademark question could be considered by the Joint Commission.

The plan suggested above has four primary purposes. First, it affords the Mexican pharmaceutical, chemical, dye and allied industries all possible assistance from United States industry. Second, the plan leaves to the Mexican Government the determination of the type and degree of assistance which each of the vested companies may require. Third, the plan provides that all commercial and business relations shall be between private United States concerns and the Mexican Holding Company or Mexican vested enterprises. And fourth, unless the Mexican Government requests otherwise, the administration and management of the vested companies will remain entirely in Mexican hands. The purpose of the plan is to endeavor to make available to the Mexican Government sources of supply, technical experience and other forms of assistance which the Mexican Government may desire in relation to the development and coordination of vested companies in the field of pharmaceuticals, chemicals, dyes, and allied products.

  1. Not printed.
  2. Not printed.
  3. Letter of July 9, p. 515.
  4. Not printed.
  5. Successor of the Board of Economic Warfare.