823.6363/2–948

Memorandum of Conversation, by the Secretary of State

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Participants: The Secretary of State, the Ambassador Designate of Peru, the Chargé d’Affaires of the Embassy of Peru, and the Chief of Protocol.

The Chief of Protocol1 presented to me today at 12:00 noon, His Excellency Señor Don Alfredo Ferreyros Ayulo, the new Peruvian Ambassador to the United States. Señor Ferreyros was accompanied by the Peruvian Chargé dAffaires, Señor Fernandez-Dávila.

After an exchange of courtesies the Ambassador said that he had come to his post in Washington as a businessman rather than a diplomat. I told him that this was good as the relations between our countries were now those of business. The foundations in other respects had already been laid in this hemisphere and business between our nations was now the important question of the day. I told the Ambassador that I would speak to him very frankly. We had used our natural resources to the limit during the war, especially petroleum. The Air Force tanks and the Navy had consumed huge quantities, and we had just poured it out. I said that my information was that we would have to depend more and more upon outside sources for future supplies of petroleum. Oil fields had been opened up in the Near East, but that was an area which was none too secure and where changes might take place. Natural resources in this hemisphere had not been developed to the extent that they could be and should be. I said that I understood the political bugaboo, raised usually by the opposition to the Government in office, but that some way should be found to resolve this problem. We were not interested in how this was done, in the method or the means by which the Latin American countries developed their resources. All I was interested in was that the resources should be developed. If this meant foreign investments let it be foreign investments, and if the countries concerned felt that safeguards must be taken against foreign investments let them take safeguards. [Page 720] I said that I thought the United States might serve as an example of development through foreign investments, our economic system had been largely developed in this way. I cited the railroads and the cattle industry as examples. $350,000,000 had been invested by the British in the cattle industry in Arizona alone. From 1867 until very recent years the history of the American railroads was a story of foreign investments. If one looked at this country today one could certainly not say that we suffered from such investments. Furthermore, our people now hold control of the entire economic system and derive the benefits therefrom. Mexico, I said, showed the opposite. The oil industry had gone into Mexico, the Mexican Government had expropriated the oil properties and production was now about thirty percent of what it was formerly, and an entirely new start would have to be made. Brazil, I also mentioned, was producing oil, but on a very small scale, and that was not what I meant when I spoke of the development of the natural resources of the countries in this hemisphere.

The Ambassador stated that he greatly appreciated my talking to him in this way and that he agreed with what I had said.

I thanked him and said that the whole matter was now of importance for reasons of security, for the economic well-being of all concerned, and that it was a subject that would surely come up at the Bogotá Conference.

G[eorge] C. M[arshall]
  1. Stanley Woodward.