BY POUCH Mexico, July 26, 1942,

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1 BY POUCH Mexico, July 26, 1942, Dear Philip: I have your letter of July 21 and as I have been spending all of the day, all of this Sunday, la my office, and although it is already 6:)0, I want to take this opportunity to writs you in reply to your inquiry as I fssl that otherwise X may not be able to do so for some days. Our burden hers IB constantly increasing and although my people are doing their Jobs, the scope of our activities is so wide that the same thing happens here of course as happens at home, - those of us who sit at the top of the heap have almost more than we can handle. I am quits familiar, although not to the degree that you are, with the fact that Washington is full these days of well-meaning people without adequate background in our field who are convinced that the Department is handling certain matters la a reactionary, unimaginative and ineffective manner. It is one of the strange and inexplicable things which we have had to deal with for years in the Department and it Is quits natural that in this time of stress we should have this same old attitude ia an exaggerated form. Tou will recall that the Board of Economic Warfare and several other organizations of our government were dissatisfied with the handling of our Procurement activities in Mexico. Their dissatisfaction was based on reports they got from various people that the Embassy and Ransom,who was in charge of Procurement for the Defense Supplies Corporation, were reactionary, uninformed and conservative and aot understanding of the Emergency, These reports all came from people who were interested in selfish and Improper schemes which this Embassy and which Philip W. Bonsai, Esquire, Department of Stats, Washington, D. C. Hansom/

2 I 2 Ransom had to stop. War always brings out the best la individuals as welit as the worst. The broad program of economic oollaboration as pert of our Good Neighbor policy has found especial espression in Mexieo because of contiguity and also because of necessity - for wo need so many things from here which we cannot get elsewhere. This program meant to a lot of people at home the opportunity for making quick profits out of our government and oat of the Mexican Government without any thought whether the schemes they were fostering would be constructive or productive, fhey came down here In groups and singly and they had ell kinds of schemes, the primary objective of which was to got a slice, and a good slice, out of the money which they thought wo were going to pour into Mexico with aa open and uncontrolled hand. There wero a lot of people who were interested in mining and other projects who had ao iaterest whatever in getting out materials which we so so desperately need, but who were laterested in trying to get something for themselves out of promotion projects. % am not a reformer aad I sat not a fanatic. X think I em very much of a realist. X know that the world cannot be reformed in a day. I knew however that oar whole program of oollaboration with Mexico which was so important to us, could be wrecked if these people could have their way. X knew that 1 had incurred the enmity of all kinds of people by taking a firm stand in these matters but there are some things which are sore importaat than Individuals. Z have therefore taken a Strong stand against these schemes. Wo have carefully studied 9f%xj project and where ws found It had any prospect of being helpful we have seen thai it has been forwarded and studied by the proper agenoies at home. Ransom, la charge of the Procurement activities, has done the same thing and ho has been unremitting as wall as intelligent la his labors* He has done a good job. He has sent aa sar to everyone bat he has steadfastly refused to have anything to Ao with the crooks sad "coyotes" whether they came from home or from here. This is the only course we would follow in normal times and certainly la these times. The result was that these disappointed schemers went to Washington and filled the ears of competent and well-meaning persons there with their stories of oar incompetence/

3 * I. incompetence, conservatism and lack of imagination and activity. Several peopla have recently been down bam looking into this situation and no ana waleotaad them being here mora than Bansoo and I. It was most helpful and productive because these men who same down here hare found without exception that the reports which came to them la Washington came from people who warn utterly unworthy of aonfidenoa and who were simply trying to take advantage of the times la which wa are fey thair selfish purposes. I am happy to say that this situation with regard to Procurement If aieared up. The sis or seven agencies of our government interested in Procurement have decided that there shall be one Procurement agency of our government in Mexico, that it shall ba in aharge of Saasom and of course this office with which ha collaborates in tha most intimate manner daily and many times daily* The "coyotes" have, I think, been routed and la this phase of our problem at least, tha situatloa which threatened to be serious has beea clarified. X have mentioned tha foregoing problem because it falls exactly within this same general category of criticism as that particular subject which you raise) in your letter* I think that tha organization of tha Department of State abroad and particularly Is tha American Republics is very effective, and we certainly have a responsibility in keeping our government informed with regard to Axis activities, espionage, etc. in tha other American Republics. This does not mean, however* under any stretch of tha imagination or of realism that tha Department of State, or any agency of oar government, ean have tho responsibility for doing away with and eliminating these Axis aetivitioa la the other American Republics. Tou properly point out in your letter that the oil* mlnating of Axis activities in others of the American Republics is primarily a function of these governments. Zt is aot a function which wo could take over because they would not admit it* the governments whloh aro ad war with the Axis and those whloh have broken relations with the Asia are disposed to collaborate with us la the elimination of theso activitiea, hat they would no more be disposed to permit us to do tho Job than they are disposed to permit us to take over their external or iatornal affaiw. One of the most dangerous and yet one of the moat common things

4 - 4common things we have to contend with among certain well-meaning people at home today 1* that they do not seem to realise that while we are fighting the greatest war la our history to maintain our sovereignty aad that of other States, we cannot at the same time begia to violate the sovereignty of other States and to interfere la their internal affairs. Those of as who know the American Republics, know that while they are disposed to cooperate with us mors than ever before, and in most eases to extraordinary limits, they are doing so because they think we are honestly fighting with all our strength to maintain their sovereignty as well ss our own. There is no point on whioh these countries are more susceptible than that of sovereignty. Although the Mexican Government is disposed to cooperate with us to an extraordinary degree, this question of sovereignty keeps eropping up all the time and their cooperation with us is so whole-hearted because of our respect for their sovereignty and because of the broad principles underlying our Oood Seighbor policy. These well-meaning people at home do not realize that wo eaa no more interfere la the internal affairs of these other States than we would permit these other States to isterfore in oar internal affairs, fhe same people who want us to take aetloa which would ho direct interference la the iaternal affairs of other States would be those that would raise the greatest clamor if some other State endeavored to interfere in our internal affairs* The eontrol and elimination of Axis activities, espionage, etc. la the other American Republics is, vast be and eannot be other thaa their responsibility* They may act be ss effestive in carrying through sush opera* tions ss wo might be at home. They may not have the organizstlon, the funds and the experience that we have st homo. I am not one of those, however* who is too proud of our own performance la this field and considering all the eireumstances the sstion of the other American Republics has. so s whole,beea relatively very effective* I sm aot referring now to the Argentine or to Chile. In practically every one of the other American Republics with these two exceptions, Z think very effective steps ore being taken in the control of Axio activities and espionage* S sometimes wonder If their action is not ao complete and as thorough-going ss ours. X think we are much too quick to pass judgement oa what we call the inefficiency and lack of activity of oar Latin friends, la this field. While 1 was la Cuba, and before/

5 - 5 before Cube or we were ia the war, the Cuban Government was taking la many ways much more wide-reaching and effect! Ye actioa la this field than we were. There may hate been aome ineffioieney la performanoe but on the whole their notion was effeotive. Hera la Mexico, in spite of all the background, the Mexican Government in moving rapidly and effectively in this field. It has gone farther in rounding up Asia nationals than we have. St may be and probably Is true that hare aad there they fall down in their action on a particular ease but we at home are doing exactly the same thing. Even though we are la the midst of the greatest emergency la our history, wa are giving to all these people a oourt trial and letting some of them mass through our hands because we have not what the oourt considers adequate evidence. Can we oomplaia if under these circumstances la the other American Republics, somebody slips through the net mow and then? I am ready to assert that ia Mexico as a whole as wide-spread and aa affective action is being taken against undesirable and dangerous Axle nationals aa is being taken ia our own country* Whenever we bring to the attention of the Mexican authorities Information with regard to an Axis national or Axis activities, wa find that motion is taken. Xf wa bring to the attention of the Mexican authorities the need for protection of any American Interest against sabotage, etc. we find that that protection la given. The Mexioaa army may not be aa affective military force because of laok of equipment, etc. bat It is a very effective polioe force and it is used for that purpose. The same is true, as you know, ia a good many of the other American Republics, where the army is a good police force. There are important mines, hydro-eleotrio plants and similar establishments la Mexico which would be a ready objective for sabotage. It is my understanding that the Mexioan Government, through the army aad its police, has tken what are considered adequate measures to protect these establishments against sabotage. The other day the Naval Attach! brought to my attention what he considered necessity for proteatlon of a certain American owned/

6 6 - American owned mine against sabotage. Our consul, too, recommended that certain Axis nationals should be remosed from the vicinity of the mine because if the possibility of sabotage* When X inquired into the matter X found that the Axis nationals who represented this potential, danger were some half dozen Japanese farm labor* ers. When 1 went Into the matter further with the American owner and operator Of the mint X found that the mine was guarded by what they considered an adequate number of Mexican soldiers. Whom X asked the American operotor of too mine mod the one who would bear the chief responsibility If anything happened as to whether he considered the military protection he was getting to be adequate, ho said that he considered it adequate* I have asked the owners and operators of hydro-electric plants in Mexico which as you know are largely foreign owned, so to whether they consider they are getting adequate protection and in every ease they considered that the Mexican Government was giving adequate protection. Some time ago X asked the American responsible for the largest mine operations in Mexico as to whether his mines were getting the protection they ssked for. He la* formed mo that In every case where they had asked for military protection of their mines, it had bees given and was being maintained la a satisfactory manner* All the information X have is to the effect that the loesl military authorities la Mexico have definite instructions from the Mexican Government to grant adequate protection to any Industry, miss, hydro-electric plant or other establishments which might be affected by sabotage, when such protection was asked and to give it unasked when in the opinion of the military commander It was considered necessary. In reply therefore to your specific question as to what degree I, as representative of the United States, would feel responsible if a mine hers were sabotaged, X would say that X would feel that my responsibility had been adequately met* Since too declaration of war by the United States, the Embassy has bees giving thought and attention to this matter Whoa X came here in February, 1942, it was one of the first things I went into. The owners of American mines, Industries/

7 ?" industries and establishments which might be sabotaged have been told that if they need protection or feel that they need it, they ere to ask for it and if it is not ieiaediately accorded to let us know* So far aa this Smbaaay knows, and we keep in constant touch with this matter, not a single request for assistance or protection has beer* refused or inadequately met. The owners end operators of these establishment have not only direct responsibility to themselves, but they also have a definite feeling of responsibility la our war effort and that of Mexloo. They are the first, therefore, who would let ua know in case they felt they did not have adequate protection. X do not see what our government can do in providing protection for American interests la Mexico aa long as the government of Mexico is taking adequate steps* X think it is to the credit of the Mexican Government, and it is a credit which we must give it, that it fees shown proper initiative la this respect. It is alive to the dangers of sabotage and la guarding against such sabotage. Under these circumstances,for our government either from Washington or through this Embassy, to aa* desvor to take steps here now which the Mexican Government is adequately taking is of course out of the question. There would certainly be no responsibility on any agency of our government at horns if any active sabotage were to take place is Mexico today. I believe that the owner and operators of Aaericaa controlled enterprises in Mexico are alive to tits situation and would to the first to inform us if there vers inadequate protection of their property by the Mexican authorities. It would interest me to know whether there has been any report to the effsot that American owned or controlled enterprises in Mexico are not receiving adequate protection. You know of course that there are a few American enterprises, and X am happy to say they are very few, which still feel that so far as their property is concerned, Mexico is a part of the United States. Such persons who have such small regard for the Mexican people and for Mexican sovereignty would not fool that they ware adequately protected unless it was by our own armed forces, I think, howevey, that we no longer need to worry about such persons or enterprises for if they are living in the past, the Mexican Government and wo are living ia the present* Wa have/

8 - 8 We hare here in the Embassy a Military and a Naval Attache and we have a representative sf the FBI who tea a staff of his own. We have thess almost thirty consular establishments all over Mexico. All these establishments have specific Instructions to follow carefully ASls activities, espionage, possibilities of sabotage, etc* Every morning at f o'clock an officer of the Embassy meets with the Military Attache, the Naval Attache and the FBI representative. During this daily morning meeting they consider all the reports that have come to them and which come to the Embassy from the field and which ike Military and Naval Attaches get from their officers in different parts of Mexico. In this meeting this Information is correlated and coordinated and is a despatch to the Department I have reported upon how we effectively handle this material so that it can best be taken ssrc of at home is the Departments sat agencies concerned. But so far ss action is concerned, MID, ONI and FBI can do nothing is Mexico itself and they can do no more than the Department of Stats* What we do As however, is to bring to the attention of the Mexlesa authorities, with whom we are in close contact, All sound and reliable information which we gather through our own officers, through Military Intelligence, through Naval Intelligence and FBI. We have found that the use which the appropriate Mexican authorities make sf this information is increasingly effective. They are, Z believe, making as much use sf such information as we give them as we should make of similar information passed on %* is by friendly agencies of sther governments in the Halted States. We can in no sense complain of the collaboration we are getting from tha Mexican authorities in these matters* If any one Is trying to place any responsibility on the Department for not meeting our obligations in these reppeots, it is done out sf Ignorance of the facte or out sf plain ill sill. I can assure you that the information which is gathered by our diplomatic and consular Sffleers with regard to Axis activities, espionage, probable sabotage, etc. is still mors accurate, as it always has been, than that gathered by Military and Naval Intelligence and FBI. ft la not my desire to minimiss in any cense the work dons by Military and Naval Intelligence and FBI* X know however that their information is not nearly as sound ss ours; they are not able ts coordinate it and uss it as effectively in this country as we arc* Ss far as tha Department of Stats lc concerned/

9 - 9 concerned, and its officers, they ere meeting their responsibilities in this particular field la Mexico. X would not have a moments peaaa of mind if X did not think that we were. We are aft informational service in the sense that w give information along these lines to our own government and to agencies concerned at home, and to the government to which we are accredited. So far as action on such information la conoerned, it must be taken by the government ooncerned. Our diplomatic and consular agents cannot five instructions to the local police and military. Our government in Washington cannot give instructions in this matter to the Mexican Government. Our army and navy cannot give instructions to the Mexioan army aad navy* We oaa collaborate in the exchange of information. Anything beyond that would bo a violation of sovereignty and it would ba destructive of all that wo are atriving for. The degree of collaboration received from other.governments depends upoa thoaa governments and the effectiveness of their action la these fields depends upon the efficiency of their organization and agenoies. So far as Mexico ia ooncerued there could be improvement in effectiveness. At the same time, it must ba said that there could be improvement in effectiveness at home. So far an the general nation of the Mexican Government In aoncernad, ita action I think la relatively an satisfactory, as broad and as effaatlve as ours. X am sure that you will ba somewhat surprised at the strength of the latter statement but it is, in my opinion, justified by tha facta. Only one further thought. Some of our army and navy people at home seem to think that when another country declares war against our common enemy, that iiaaediately our armed forces can act in these countries as they would at home and that our military can practically give orders to the Military In other countries. X see a surprising laak of understanding on tha part of soma of our military and naval people. Hera in Mexico how we have an increasing number of army and navy officers in various farts of tha country. A good many of these are reserve officers who are good people bat who have little training la international practice. Some of them seem to think that we can take arbitrary measures ln these countries which are quite out of question. Some of then, out of their inexperience, place an entirely wrong interpretation on developments in the country and upon things which/

10 w? I which happen. Some of them have nothing but deprecation for the people of the country and for the armed forces of the country. They give so credit to the good faith or to the dealre to perform of the authorities of the country. This means that out of inexperience, look of Judgement, Inadequate knowledge and lack of perspective, they may send reports home with regard to com* ditiona which do not give s true picture of the situation. I hope that the foregoing letter whisk is vsry long, and too long, will give you some of the reactions which you desire to have. X hove gone into the matter so fully as Z wonted to have before you whatever information in this respect was available from here whioh X thought might be helpful to you. X can assure you that if ws do not got ia these matters of Axis activities, espionage, protection of property end so on, the results which we believe we should properly get here, I will advise the Department. If there is any phase of this subject whioh Z have not adequately covered, do let me know. With all good wishes, Cordially end faithfully yours, 03M:EHT

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