Foreign Relations of the United States, 1951, The United Nations; The Western Hemisphere, Volume II

611.12/10–151

Policy Statement Prepared in the Department of State

secret

[Washington,] October 1, 1951.

Mexico

a. objectives

Objectives in our relations with Mexico are to enlist her support in efforts to promote Inter-American and world-wide peace, develop better political, economic and cultural relations, obtain more tangible support of the United Nations policy to resist aggression wherever it may arise, including the use of Mexican troops, assure maximum co-operation in case of total war, settle individual problems arising between United States and Mexican interests, as well as problems between the two Governments, and promote mutually advantageous economic development.

b. policies

General. Our relations with Mexico derive special importance from the consideration that we must have in our near neighbor stable political and economic conditions and a sense of common purpose and direction between the two countries. Her large population, natural resources and strategic location make it vital to the defense of the hemisphere that our political relations be friendly at all times; our dealings, although firm, should be tolerant and understanding.

Relations between the US and Mexico in the past decade have been very friendly, in contrast to the generally turbulent relations between the two countries during the preceding century. Antipathy toward the US, which has existed ever since the Mexican-American War, has decreased steadily in recent years. Mexico is coming to realize that cooperation with the US is not only desirable but inevitable if Mexico is to maintain her progress and general well-being. During the first world war, Mexico maintained an attitude toward the US of “sullen neutrality,” but she was an enthusiastic ally during the second. Many essential war materials were obtained in Mexico, and she permitted recruitment of several hundred thousand Mexicans for agricultural and railroad maintenance-of-way work in this country, thereby making an equal number of Americans available for military service. Furthermore, Mexico sent an air squadron to the Far East, and thousands of Mexican nationals served in the military services of the US.

Outstanding matters pending settlement in current US-Mexican relations include the refund to Mexico of monies paid into the Railroad Retirement Fund by Mexican railway workers (1943–46), the disputed Chamizal area on the Rio Grande at El Paso, bilateral air transport agreement, a commercial fisheries treaty, more lenient travel regulations, the division of radio frequencies, and our various claims, including the Pious Fund, Sabalo, and agrarian claims.

Political. Although we do not accord Mexico unreasonable advantages in negotiations, we cannot attempt to impose our policies or overtly threaten to withhold advantages in order to obtain a better bargaining position in another field of negotiation. The Mexicans respect a demand for fair treatment when presented in a firm but friendly way; but even a vague indication of applying the “big stick” would make them withdraw from the particular negotiations and slowly stop cooperating in other fields. They are skilled at procrastination.

Our policy is furthermore to give every encouragement to a democratic system of government. We seek to convince the Mexicans of our complete respect for their sovereignty and of our lack of desire or intention to interfere in their domestic political problems, particularly in presidential elections.

It is important to show that the moral strength of the US is as great as its military and financial power. Mexicans have not forgotten that one hundred years ago their country lost almost half of its territory to the US. Our treatment of Mexico in the past, including armed intervention, political meddling and non-recognition, has created impressions that cannot be erased by the effects of less than two decades of the good neighbor policy. While more and more Mexicans each year come to believe that we sincerely intend to apply that policy permanently, many remain skeptical. We again demonstrated our good faith to Mexico during the meeting of the Joint Mexican-US Defense Commission in Mexico City, in September 1950, by returning her battle flags captured a century ago.

In order to further our political relations with Mexico, we seek to increase cultural interchange between the two countries. The American people have in the past decade become increasingly interested in the art and music of Mexico, the history of her long and bloody struggle for liberty, and in the opportunities for American business enterprise. On the other hand, the expropriations made under administrations from Madero to Cardenas are also remembered, and Catholic Americans have not forgotten the confiscation of church properties and the rigorous anti-clerical movement.

The already extensive public affairs (USIE) program in Mexico is being expanded in the effort to develop and strengthen the understanding and support there of the United States. This takes on strategic importance since Mexico’s manpower and other resources will be essential to us in event of another major war. The purpose of the USIE program is to elicit Mexican support, both official and popular, of what we do. In addition, a program which is successful in Mexico will, due to Mexico’s influence throughout the hemisphere, have an important impact in the other American Republics.

The Communists have made more significant penetration of Mexico than their numbers, or the public activities of Communist diplomatic missions in Mexico, would indicate. This has been accomplished by aggressive tactics on the part of artists, writers, and school teachers who have great influence on the intellectual and cultural life of the country. Communists are also strongly entrenched in labor organizations.

Specific objectives of the USIE program are: 1) to combat the Communist threat to the US and the security of the hemisphere; 2) to clarify by statements and actions our friendly desire to cooperate with Mexico in cultural, political, and economic matters while strictly respecting Mexico’s sovereignty; and 3) to show an accurate picture of the US, its policies and its people.

Because of Mexico’s position as one of the large political units of the western hemisphere, we place importance on the effort to obtain her support on international questions, especially those affecting Latin America.

Without infringing upon the independence of unions, and in appropriate circumstances, we endeavor to foster closer relations between organized, non-Communist labor of both countries and to separate Mexican labor leaders from Communism. For example, twenty-three members of the Petroleum Workers’ Union will spend five months in the US this year for the purpose of observing our petroleum operations and acquainting themselves with organized labor leaders here and their techniques. Although we are disappointed in the results of the ICFTU meeting in Mexico in January of this year,¹ we shall continue to strive for greater Mexican labor union participation in that organization. We also seek to diminish the prestige of Vicente Lombardo Toledano and other communistically-inclined Mexican labor leaders.

The incumbent President, Licenciado Miguel Alemán Valdes, will remain in office until December 1, 1952. He has frequently declared his friendship for the United States, and his Government has cooperated with the United States in most matters of major importance. Mexico has supported the United Nations resolutions regarding the aggression against South Korea, and high-ranking Mexican Government officials have made frequent pronouncements to the effect that Mexico will carry out her obligations in the United Nations. However, Mexico has not cooperated in the matter of sending troops to Korea and the President and other officials have stated that it is not politically possible for the administration to do so.

[Here follows a statement concerning United States support of the Alemán Government and the character of the President’s subordinates.] Mexico has had two decades of increasing political stability, and at this time there seems to be little prospect of a change in government other than by constitutional process.

Presidential elections will take place in Mexico on the first Sunday in July in 1952. As yet the Administration party, the PRI, has given no indication as to who its candidate will be. There have been some indications that President Alemán himself may be a candidate for reelection, depending upon the state of world affairs at that time. Since the Mexican Constitution forbids reelection such a procedure would require legislative action to make it possible. Several persons have announced their candidacy on minor party tickets but it is not believed that any of them have much chance to be elected. Leading candidates for the PRI nomination include Ruiz Cortines, Secretary of Gobernación; Fernando Casas Alemán, Governor of the Federal District; Antonio Bermudez, Senator and Manager of Petroleos Mexicanos; Ramón Beteta, Secretary of the Treasury; and several State Governors.

The Alemán administration has maintained Mexico’s high rate of industrial and agricultural growth; a vast program of public works is being carried forward; a courageous and far-sighted financial policy has stabilized the peso; and Mexico’s international prestige has been maintained.

Economic. Our long-range economic policy toward Mexico is to encourage the development of a balanced and expanding Mexican economy, which will insure a growing market for US goods and services, and provide sound opportunities for American investment.

Mexico’s strongly nationalistic and protectionist commercial policy serves as a deterrent to a steady expansion of the Mexican market for US products at the present time. This policy resulted in the termination of the 1943 trade agreement between the US and Mexico on December 31, 1950,² leaving the two countries without a contractual basis for their commercial relations. Quantitative restrictions on imports were removed, but tariffs were substantially increased on many products which enter the Mexican market from the US. Such action is contrary to the objectives of the General Agreement on Tariffs and Trade,³ but thus far Mexico has shown no interest in adherence to it. We hope that Mexico will perceive the advantages of participating with other trading nations in the General Agreement and that, as soon as practicable, negotiations to that end may be undertaken. Meanwhile, under existing US policy, Mexico will continue to receive MFN treatment.

During the emergency period, the Department will be concerned with three major problems relating to materials of strategic importance: 1) The support of efforts to expand available supplies of Mexican metals, minerals, and other products and to obtain them for our use; 2) the maintenance of Mexico’s cooperation in preventing shipments to Soviet bloc countries of items of primary strategic importance and other materials which should be controlled for strategic reasons; and 3) the support, within the established general policies and procedures, of Mexico’s valid requests for assistance in obtaining supplies of essential materials which are in short world supply.

In view of the magnitude of the commercial and financial transactions between the United States and Mexico, it is important that Mexico maintain a realistic and stable peso-dollar rate. Mexico has been reasonably successful in doing this by following sound policies in correcting its post-war balance-of-payment difficulties. The existence of a US-Mexican Stabilization Agreement since 1941,⁴ recently extended to July 1953,⁵ has helped Mexico to stabilize its currency, to maintain a free exchange system, and to obtain relief from balance-of-payment stringencies. The stabilization fund was first established at $40 million (US), then raised to $50 million in 1947, and it has remained at that amount except for 12 months, 1949–1950, when it was temporarily increased to $62 million. The fund was utilized for the purchase of pesos to the extent of $37 million, all of which have been repurchased by Mexico. Finance Minister Beteta, a US-educated economist, has shown rare determination in maintaining a sound financial policy.

The economy of Mexico has strengthened considerably since the stabilization of the peso at its present par, 8.65 to 1, in June 1949. Following the outbreak of hostilities in Korea, the country’s holdings of gold and foreign exchange sharply increased, due principally to the influx of flight capital. However, reserves began to level off during mid-1951. The Federal Government of Mexico has continued to meet its recognized foreign debt service payments regularly. However, because of the size of foreign debt, requests for loans out of the $150 million line of credit granted by the Eximbank on September 1, 1950, will be considered by the Department with special emphasis upon the degree of essentiality of the projects involved. A World Bank mission is now making a study of Mexico’s borrowing capacity in cooperation with the Mexican Government.

Since 1946, Mexico has sought a refund of the approximately $6 million paid by its workers into the US Railroad Retirement Fund during World War II. Although this amount would eventually be offset against Mexico’s Lend-Lease debt to the US, in accordance with the terms of the Lend-Lease settlement agreement reached in February of this year, we are continuing to seek a more clean-cut basis for handling this claim.

It is also our policy to encourage Mexico’s economic development through the diversification and increase of agricultural production. We believe Mexico should place at least equal emphasis on such a program rather than press so strongly for industrialization, although we realize the latter is looked upon by the Mexicans as the cure-all for their economic ills. Since agriculture is the occupation of nearly two-thirds of the Mexican people, improved commercial relations with Mexico depends on better conditions for these workers.

Mexico and the US have agreed upon a joint program of technical assistance⁶ in accordance with the Point IV objectives, and the cooperative missions in operation and training programs are being continued. Moreover, serious consideration is being given to an expanded program in agriculture. We believe these programs of technical assistance should be continued and enlarged, always provided that the Mexican Government continues to display a desire to share in and profit from the effort, and that no conflict or duplication develops with UN, OAS, or private programs.

We encourage the use of private capital, both Mexican and foreign, in the financing of development projects, but the resources of the International Bank for Reconstruction and Development and the Eximbank have also been generously used, particularly in the fields of inland transportation, irrigation, electric power and steel production. Mexico often seeks loans from the Eximbank because of the lower interest rate and because of the traditional reluctance of Mexican capitalists to invest their money in Mexico, except in urban real estate. This tendency should be discouraged.

The Department should at every opportunity encourage the Mexican Government to permit the participation of experienced private foreign capital in the exploration and development of Mexico’s petroleum resources, since it is believed that Mexico’s full petroleum potential can be achieved only in this way. However, Mexican laws and Mexican philosophy both are inimical to development of her oil resources by private capital. Since Mexico’s petroleum resources are important to Western Hemisphere defense, every effort is being made to supply that industry with the materials and equipment necessary to support an active and balanced development program with a view towards increasing the amount of relatively secure petroleum supply which could be available to the allied and friendly nations in the event of hostilities.

With regard to other Mexican mineral resources, it is our policy to encourage their development by causing the Mexican Government and labor unions to realize that their present tax and labor union practices retard the incentive of new American capital to enter the mining industry. We hope to stimulate Mexican production of strategic ores⁷ by assisting their experts in mining survey techniques and in offering the facilities of our laboratories for analysis of ores. This encouragement to production is carried on not only because increased development of Mexican resources is essential to the well-being and political stability of the country, but also to increase the supplies of strategic minerals which would be readily available to us in case of war.

We cooperate fully with the Mexican Government through a joint commission to control and eventually to eradicate foot-and-mouth disease⁸ in Mexico, before it damages our cattle industry. The last outbreak occurred in August 1951, but it was quickly brought under control. Although the financial burden of the program should fall in large part on the Mexican Government, it is our policy, in view of the importance of keeping the disease out of the US, not to allow the matter of proportionate financial contributions, nor the disposal of Mexico’s exportable meat surplus which is a result of the campaign, to jeopardize the continuation of present cooperative measures.

We have yet to solve our dispute with Mexico over commercial fishing rights and the extent of territorial waters, although this problem has been quiescent since mid-1950. A delicate balance, or modus vivendi, has been achieved and no US fishing boats have been molested due to Mexico’s fear that a prohibitive tariff would be placed on the entry of Mexican shrimp and tuna into the US. We continue to refute the Mexican nine-mile territorial waters claim, although the whole question is complicated by our own continental shelf and high seas fishing areas policy. However, we hope eventually to settle these questions by international agreement.

We encourage and give appropriate assistance to the development of transportation facilities which connect the marketing and production centers of the US and Mexico. The Mexicans have been granted a $56 million loan under the Export-Import Bank credit to rehabilitate Mexican railroads. However, the Bank established several conditions for the loan through which it is hoped to improve the operating efficiency of the railroads.

We are preparing to discuss with the Mexican Government a bilateral agreement covering the reciprocal operation of bus and truck traffic between the two countries. These discussions, however, are not expected to begin until after the first of next year. It is hoped that eventually Mexico will assume the leadership in the conclusion of a multilateral convention covering commercial motor traffic over the Inter-American Highway.

To date we have been unable to negotiate a bilateral air transport agreement with Mexico, due to the Mexican Government’s unwillingness to grant the routes embodied in CAB’s Latin American route decision of 1946. At the present time, the entire matter is being reviewed to determine if there is any other approach which might be mutually acceptable to solve our outstanding aviation problems.

The attitude of the Mexican Government has been a stumbling block to the successful conclusion of a NARBA agreement.⁹ The Mexican delegation walked out of the last NARBA conference. The US hopes that Mexico will eventually accede to the new convention, although it is expected that Mexico will request some concessions before it accepts this agreement.

A technical agreement has been reached for the assignment of television frequencies along the border for a range of 250 miles and this will soon be confirmed by an exchange of notes.¹⁰ Discussions are also being held looking toward an agreement covering mobile transmitting equipment, and likewise the control of electro-magnetic radiation.

The Department of State relies on the Department of Labor for determination of the need for Mexican farm workers and seeks to facilitate orderly procedures whereby the needed Mexican workers are brought into the US for temporary periods in a legal manner and under terms satisfactory to both the US and Mexican Governments. Legislation enacted in July 1951¹¹ authorized the US Government to recruit Mexican braceros in accordance with a governmental agreement with Mexico for employment on US farms. This new agreement entered into effect, following discussions in Mexico City, on August 11, 1951. The US guarantees the payment of wages and the costs of transportation of the Mexican workers and offers assurances that the terms of the individual contracts between the employer and the workers will be fulfilled.

As a result of the findings of the President’s Commission on Migratory Labor¹² and following greater public awareness of the tremendous problem of the Mexican farm worker illegally in the US and not under contract, immigration officials are carrying out a vigorous policy aimed at returning these so-called “wetbacks” to Mexico. It is our policy to encourage this stringent campaign against the illegal entrants since their presence here flouts our laws, and exploitation of them by some US growers contributes to tensions in our relations with Mexico.

International Boundary. The Department, through the US Section, International Boundary and Water Commission, will continue to assure that the benefits to this country and the obligations of this Government contained in treaties and agreements with Mexico regarding the international boundary are fulfilled. These include: 1) a settlement of boundary, water and land controversies, such as the Chamizal, and 2) construction of joint dams and engineering projects, such as Falcon Dam, to utilize the water of the Rio Grande, and the Colorado and Tijuana Rivers for the benefit of both countries.

To the maximum extent possible, the Department will not become involved in US domestic problems arising from international boundary activities. Such domestic matters pertain to the determination of the agency to operate and maintain the Imperial Dam on the Colorado River and part of the All-American Canal in California which will be used to deliver water to Mexico and the distribution and use within the US of the US portion of the water and power to be made available by the international dams and power plants on the Rio Grande.

c. relations with other states

Mexico has been for many years a strong adherent of the inter-American system and has in general been meticulous in carrying out her duties in this regard. She has developed an outstanding position among the other American republics, and has been helpful to the US in our relations with them. Mexico has a strong desire to be considered one of the political leaders of the hemisphere.

Mexico’s publicly expressed general policy is to avoid meddling in Central American politics. However, she has traditionally looked upon that area as her sphere of political and social interest; she encourages political exiles from those countries to take refuge in Mexico, and Mexican diplomatic representatives sometimes become involved in the politics of the countries to which they are accredited. Guatemala especially has been influenced by the nationalistic philosophy underlying the Mexican Revolution and by Mexico’s extreme leftist labor leaders.

Mexico follows closely the general course of South American politics but is cautious in adopting any partisan attitude in the rivalries among Argentina, Brazil and some of the other South American republics. We can in general count upon Mexican support in carrying out the terms of the Rio Treaty¹³ and other international agreements.

Mexico never forgets her cultural relationship with Spain. She has consistently refused, however, to recognize the Franco regime and has recognized the Spanish Republican Government-in-exile. In the UN Mexico voted against resumption of normal diplomatic relations with Spain by member nations.

During World War II, and particularly at the time of Ambassador Oumansky’s¹⁴ assignment to Mexico, the Mexican Government had a generally friendly attitude towards Russia. This friendship has deteriorated, and although Communist propaganda is disseminated actively by the Russian satellite embassies in Mexico, there is no evidence of progress in promoting Communism or even of maintaining the position reached during the Oumansky period. A number of leftist or Communist-inspired conferences have been held in Mexican territory. The Mexican labor leader, Vicente Lombardo Toledano, claims not to be a member of the Communist Party, but his actions suggest that he is more than a fellow traveler. He is the recognized leader in communistic propaganda and activity against the US. Certain sectors of organized labor with leftist tendencies representing minority groups have shown a hostility to the US, but it is not believed that they carry much weight or present any threat to relations between the two countries.

Mexico has publicly announced a claim to part of Belize, but this has not been a cause of dissension with the United Kingdom. However, if British control of the territory should end, a lively dispute between Mexico and Guatemala might ensue.

Canada has made determined efforts in the past few years to increase trade with Mexico. While the volume of trade between those countries is still small as compared with US-Mexican trade, it is growing rapidly and taking on importance. Closer relations of a political, economic or cultural nature between Mexico and Canada, even if established, would not create a problem since US-Canadian objectives are so similar.

Mexico has played an important role in the work of the United Nations since the organization was established, as well as in the OAS. Luis Padilla Nervo, Chairman of the Mexican Delegation to the UN, has won an enviable personal reputation as an effective and intelligent leader among UN representatives and has rendered outstanding service to the organization. Dr. Jaime Torres Bodet, Director-General of UNESCO, is another example of the wide scope and high competence of Mexico’s participation.

Mexico’s coldly formal support of the UN effort in Korea has been disappointing. In addition to the fact that her leaders have felt it politically inexpedient to do more in view of the presidential election in 1952, this can probably also be attributed to her feeling that the Korean affair is really between the US and the Soviet Union, to a combination of nationalistic and Communistic propaganda which has succeeded in making it seem to be politically unwise for the Mexican Government to support the US too openly, to her unjustified but strong belief that we have given insufficient recognition to the Mexican contribution in World War II, and to a fear that Mexico’s armed forces are inadequately trained and equipped to perform creditably, this being: attributed in part to her inability to obtain arms as needed from the US. However, Mexico offered some foodstuffs and medical supplies to the UN which were accepted.

In most major political matters Mexican representatives have collaborated with the United States, although serious differences of views have occurred in the UN in the fields of freedom of information and dependent areas.

d. policy evaluation

Our policy toward Mexico has been successful in its most important aspects. We have a friendly neighbor on our southern border and Mexico’s actions in the UN and OAS are generally in accord with those of the US. The financial and technical assistance which the US has given to Mexico in recent years is productive of and conducive to continued cooperation by Mexico in the political, economic and cultural fields. Mexico remains a large market for our exports and furnishes us several strategic materials. Mexican labor is being provided on a legal contractual basis for US agricultural requirements and the flood of illegal labor has been slowed. Some progress is being made in clearing up outstanding problems, mostly in the economic field, but Mexican trade practices remain unsatisfactory from our point of view and agreement on aviation, telecommunications and fishing matters is yet to be reached. With the exception of the Chamizal question, there are no boundary problems between the US and Mexico. An expanded information program is expected to help us counteract communist propaganda in Mexico.

We should continue to seek means of furthering better understanding between the Governments and the people of the two countries; and to seek solution of the economic and political problems arising from time to time. The only satisfactory means of doing so is through a policy of mutual respect and cooperation.

1. The Mexican delegation had withdrawn from the meeting, and subsequently had joined with the Argentine delegates to consider a new federated labor organization. Pertinent documents are in file 800.062–ICFTU.
2. For documentation on the termination of the agreement, see Foreign Relations, 1950, vol. ii, pp. 939 ff.
3. For text of the General Agreement on Tariffs and Trade (GATT), concluded at Geneva, October 30, 1947, and entered into force for the United States, January 1, 1948, see TIAS No. 1700, or 61 Stat. (pts. 5–6).
4. For text of a joint statement by the Secretary of the Treasury of the United States and the Secretary of the Mexican Treasury announcing the signature of the agreement on November 19, 1941, see U.S. Treasury Department, Annual Report of the Secretary of the Treasury on the State of the Finances For the Fiscal Year Ended June 30, 1942 (Washington, 1943), p. 291.
5. A Supplemental Agreement, extending the existing Stabilization Agreement until June 30, 1953, was signed on July 26, 1951 (812.131/7–2651).
6. A General Agreement for Technical Cooperation between the United States and Mexico was effected by an exchange of notes at Mexico City, June 27, 1951, which entered into force on the same date. The notes were transmitted to the Department of State tinder cover of despatch 3280, June 28, 1951, not printed (812.00–TA/6–2851). For a press release concerning the agreement, dated June 27, 1951, see Department of State Bulletin, July 9, 1951, p. 67.
7. In August 1951, representatives of the United States Atomic Energy Commission and the Mexican government held discussions at Mexico City concerning a proposed joint uranium development program in Mexico. As a result of the discussions, a draft memorandum of understanding, dated august 20, 1951, was prepared by the Department of State with the approval of the Atomic Energy Commissioners and presented to the Mexican Government for consideration. No agreement was reached on the matter, however, in 1951. Pertinent documents are in decimal file 812.2546.
8. For previous documentation on this subject, see Foreign Relations, 1947, vol. viii, pp. 811 ff.
9. On November 15, 1950, a North American Regional Broadcasting Agreement was signed at Washington by the United States, Great Britain, Canada, Cuba, and the Dominican Republic; the agreement entered into force for the United States, April 19, 1960. For text, see 11 UST 413, or TIAS No. 4460.
10. The United States note, dated August 10, 1951, and the Mexican note, dated September 26, 1951, were transmitted to the Department of State under cover of despatch 1118, October 81, 1951, not printed (912.44/10–3151). The Department’s press release of October 26, announcing the agreement is summarized in Department of State Bulletin, November 26, 1951, p. 865.
11. Reference is to Public Law 78. See the editorial note on p. 1488.
12. For text of Executive Order 10129, dated June 3, 1950, which established the Commission, see 15 Federal Register 3499, or Department of State Bulletin, July 3, 1950, p. 33. For the Commission’s report, see Migratory Labor in American Agriculture (Washington, 1951).
13. For text of the Inter-American Treaty of Reciprocal Assistance (Rio Treaty), opened for signature at Rio de Janeiro, September 2, 1947, and entered into force for the United States, December 3, 1948, see TIAS No. 1838, or 62 Stat. (pt. 2) 1681.
14. Konstantin Alexandrovich Umansky had served as Soviet Ambassador to Mexico from June 1943 to January 1945.