314. Despatch From the Embassy in Mexico to the Department of State 1
SUBJECT
- Conversation between Mr. López Mateos and Mr. Eugene Black
During his recent visit to Mexico on the occasion of the opening of the Lechería Electric Power Plant (a project which used IBRD funds), Mr. Eugene Black, President of the International Bank for Reconstruction and Development, had occasion to hold lengthy conversations with both President Ruiz Cortines and with President-Elect López Mateos.2
Nothing of any particular interest developed from the conversation with President Ruiz Cortines, but from the three hour conversation with Mr. López Mateos, Mr. Black noted and passed on to the Embassy the following observations.
- 1.
- Mr. López Mateos seemed to be a man of considerable attainments and intellectual stature. He was alert, understanding, and appeared to have a great deal of balance.
- 2.
- He showed himself to be well disposed toward the United States and indicated the intention during his tenure of office of maintaining very good relations with the United States. At the same time Mr. Black noted that López Mateos had his share of misconceptions and distorted ideas about the United States.
- 3.
- The President-Elect pronounced himself definitely in favor of bringing foreign capital to Mexico.
- 4.
- He was ignorant of the real nature of the International Bank, regarding it (until Mr. Black explained the situation to him) as a purely American lending institution.
- 5.
- He was not favorably disposed toward the Mexican Light and Power Company, because the company, in his opinion, did not fulfill its responsibilities by investing its own money in new installations. He resented this firm’s headquarters not being in Mexico.
- 6.
- He was not opposed to private power companies as such, and indicated that he believed there was room in Mexico for both private and public power.
- 7.
- Mr. Black expressed his opinion that Mexico’s rate structure for public utilities was economically unsound and pointed out that Mexico could not expect IBRD loans in fields—railroads, electric power, or others—where an uneconomic rate structure was evident. Mr. López Mateos expressed his understanding of the situation and his general agreement with Mr. Black’s observation. While the President-Elect did not say so specifically, he implied that a rate increase would be authorized for the Mexican Light and Power Company.
- 8.
- López Mateos spoke at some length of Mexico’s need for foreign credits. He emphasized his intention to defend the peso and not to devalue if this could possibly be avoided, but he also appeared well aware of the dangers ahead and of the importance of obtaining public credits to avoid these dangers.
- 9.
- Mr. Black stressed the concern of the Bank regarding Mexico’s trend toward socialization of its industries. Mr. Black made it clear the Bank would not lend money to Mexico if they continued to follow a socialistic course.