223. Memorandum From the Deputy Under Secretary of State for Economic Affairs (Prochnow) to the Under Secretary of State (Hoover)1


  • Eximbank Loan Applications from Mexico

This morning I had a call from Sam Waugh protesting strongly the view of the Department of State on the matter of dragging our feet in connection with the requests from Mexico for loans. The particular loan in question at the moment is to Fundidora de Fierro y Acero de Monterrey for approximately $26 million. Mr. Waugh says they are ready to move and that a delay would give the Bank a bad reputation. He thinks it is a mistake to delay a credit to a private company in Mexico.

You are aware of Mr. Holland’s views. I talked with Ambassador White yesterday and he thinks that the Central Bank would soon learn about the delay and that a delay would be helpful to us. At present I am going along with Mr. Holland and Ambassador White on this procedure on the delaying tactics with the Fundidora loan because of its size and on any Mexican Government credits.

Have you any suggestions?2

  1. Source: Department of State, Central Files, 103–XMB/4–1756. Confidential.
  2. A handwritten note on the source text reads: “4/19 Mr. Hoover discussed with Mr. Prochnow and Mr. Burgess, Treasury.” A memorandum of the Secretary’s Staff meeting, dated June 26, 1956, summarized Assistant Secretary Holland’s report on the Mexican loan situation as follows: “Mr. Holland said that Mr. Waugh, President of the Ex-Im Bank, wished to speak with the Secretary about the Mexican loan situation. In response to a question from the Secretary, Mr. Holland said Ambassador White now seems to believe that we should go ahead with the steel loan while delaying action on other loans now pending. Mr. Holland emphasized the urgency of the matter.” (Ibid., Secretary’s Staff Meetings: Lot 63 D 75)