by Gerard Colby
At the beginning of 1940, Nelson flew to Mexico with Tod to discuss the matter with the Mexican government. But their companions on this trip, Mr. and Mrs. Walter C. Douglas, indicated that a larger political goal was being pursued.
Douglas was a director of the Southern Pacific Railroad, which had properties in Mexico and a big stake in Mexican trade with the United States. Douglas was convinced that a Rockefeller intervention in the Mexican oil crisis would benefit everyone concerned. The failure of the negotiations was evident. New blood was needed.
Nelson was happy to give diplomacy a crack. If it worked, he would be pulling off the diplomatic coup of the decade. He spent a month working out terms acceptable to Standard Oil, and then he and Tod flew to Mexico with the Douglases.
Cárdenas greeted them with typical Mexican warmth at his new home in the village of Juquilpan de Juárez beside Lake Pátzcuaro. Here, at last, was the kind of stockholder Cárdenas had sent Cam Townsend to New York to seek out. Nelson, however, played it coy. He identified himself only as the president of MOMA and confined his comments to the show on Mexico’s cultural history. He asked Cárdenas to match the museum’s $20,000 contribution to the cost. When Cárdenas readily agreed, Rockefeller next turned to another concession he wanted. The Rockefeller Foundation was having difficulty with the seniority hiring requirements of Mexican labor law that prevented young Mexican physicians who were trained in the United States by the foundation from stepping into top positions in rural health care.
Again, Cárdenas agreed to make the necessary exceptions.
When there was still no mention of oil, Cárdenas invited the couples to spend the night. But even after dinner Nelson did not bring up the oil crisis. Since Nelson was in the stronger position, he could afford to wait. It was a tactic that had given Senior the edge in so many deals.
The following morning, Cárdenas decided to flush Nelson out. He directly raised the issue of the expropriation of oil.
“I’m here as a private citizen, and have no official connection with the oil companies,” Nelson said disingenuously. That pro forma disclaimer aside, he launched into a four-hour discussion.
“Your businessmen don’t associate with our government officials or with our business community,” Cárdenas told Nelson. The arrogance of foreigners aside, Mexico’s claims had a historical basis that stemmed from its struggle for independence. “You have to remember that in the background is the seizure of Texas in 1836, the United States action in taking New Mexico and California in 1846, in sending your army against [Pancho] Villa in 1916. Then you have to remember that our revolution ended the domination of the Spanish ruling class in Mexico and restored the self-confidence of our people. That was our liberation from domination in our own country.” But that liberation meant that the economic domination by American companies and banks also had to end, from the railroads to the sugar estates and henequen plantations to even the oil companies, the most arrogant of all. “We must retain ownership even if the oil has to stay in the ground. Better that than for the people to lose their dignity.”11
Nelson was stunned. Cárdenas’s convictions were so earnest and basic that they were overpowering. Nelson tried to negotiate terms that left Standard and the other oil companies with majority control, but the Mexican president would not hear of it. Forty-nine percent was his maximum concession. Mexican oil must remain Mexican.
Nelson went away defeated, but wiser. He returned to New York and reported the results. His faith in his mission was not shaken; if anything, it was confirmed. He was now convinced that the United States needed his leadership, at least with respect to Latin America.
Beardsley Ruml had already begun holding meetings of the Junta at his Greenwich Village home. Here were Nelson’s closest advisers, men who had participated in the first 1937 trip through Latin America and shared Nelson’s concerns about expanding American business in the region. They wanted to stop the growth of German and Italian investments and find some way of accommodating Latin America’s rising nationalism before socialist currents became too strong to reverse.
The meetings of the Junta soon moved from Ruml’s home to Rockefeller’s luxurious Fifth Avenue apartment. There, surrounded by paintings by French and American masters and beneath the Matisse mural that adorned the living room, they shaped a series of proposals that were to influence the course of history. Then Ruml and Rockefeller took the proposals to Washington to discuss them with two of Roosevelt’s advisers. Nothing came of them.
Finally, in May, Ruml and Rockefeller decided to turn again to Hopkins. The busy Hopkins asked them to distill the Junta’s proposals into a policy paper. Ruml set to work on what turned out to be a broad and far-reaching plan for a “Hemisphere Economic Policy.”
Nelson arrived at the White House on June 14 and was escorted immediately to the Lincoln Room. Hopkins was there to greet him.
As Nelson drew out the three-page memorandum from his briefcase, Hopkins leaned back in his chair and gravely asked him to read it aloud.
“Regardless of whether the outcome of the war is a German or Allied victory,” Nelson said, “the United States must protect its international position through the use of economic means that are competitively effective against totalitarian techniques.” Like Cameron Townsend’s cabled pleas to Secretary of State Hull a year and a half earlier on the need to preserve Latin American friendship as a counterweight to Axis influence, Rockefeller made the pitch for hemispheric cooperation. But instead of moral arguments, Nelson’s case had a cold, hard economic thrust.
“If the United States is to maintain its security and its political and economic hemispheric position,” Nelson continued, “it must take economic measures at once to secure economic prosperity in Central and South America, and to establish this prosperity in the frame of hemisphere economic cooperation and dependence.” This statement was from one of America’s emerging political powers with a wealth of resources literally at his fingertips. Hopkins was now listening closely.
Since the British blockade had cut off Latin America’s traditional European markets, he continued, emergency action had to be taken to stimulate the flow of trade between the United States and the rest of the hemisphere. Tariff walls had to come down. An “open door” policy had to be initiated to permit American corporate investments in the southern lands. Latin American surplus products had to be absorbed. The consular service had to be augmented by a bold new program of increased cultural, educational, and scientific programs. Moreover, these programs should stimulate production to meet the needs of American industry and its people, while drawing on the expertise of existing private agencies. Finally, to coordinate all these efforts, a small advisory committee, directed by a presidential assistant with direct access to the president, would be required.12
It was obvious to Hopkins whom Nelson had in mind for that job and what the composition of the advisory committee would be if left to the Junta. There was no doubt also that the Rockefeller Foundation could be expected to play a leading role and that American corporations, including those controlled by the Rockefeller financial interests, would rush into Latin America to fill the void left by the loss of European markets and investors.
Hopkins agreed to bring the subject up with “the Boss.” Within twenty-four hours, the Rockefeller group’s plan was on the president’s desk.
Roosevelt read the document and passed it along to Hull at State, Morgenthau at Treasury, and Wallace at Agriculture. There were objections to the proposal, but as far as the president was concerned, they simply could not outweigh the formidable opportunity that the power of the Rockefellers offered. The president ordered the new economic program to begin on June 28.
What made the Rockefeller-Ruml proposal unique was its proponents’ independence from bureaucratic infighting and their enormous financial power. Nelson, however, was passed over for the top job. “Nelson doesn’t have the kind of ability needed for the job,” said presidential aide James V. Forrestal.13
Nelson had little cause for celebration when his thirty-second birthday arrived on July 8. His memorandum had gotten him nowhere. His broad free-trade proposal ran contrary to Undersecretary of State Welles’s previous policy of sticking to tariff agreements that were strictly reciprocal in nature. It was just the beginning of a Welles-Rockefeller antagonism that would flare up throughout the war.
Nelson’s own attempt to build cultural bridges with the Cárdenas government through the MOMA Mexican art exhibit had also been rebuffed. The State Department prevented President Roosevelt from being a sponsor of the show. To make matters worse, Nelson’s negotiations with Cárdenas on behalf of the oil companies had failed, too.
In fact, the only recent case of collaboration between the Rockefeller Foundation and Washington was a Rockefeller grant to anthropologist Mary Doherty, at the Institute of Current World Affairs, for her investigation for the Bureau of Indian Affairs (BIA) of Latin American government programs for Indians. This survey was a key component of a broader intelligence operation by Washington. The Indians of the Americas had been decreed honorary Aryans by the Nazis as part of Hitler’s propaganda drive among the major labor force of the Andes and Central America.
This did not seem a promising start for his generation’s efforts to safeguard the Rockefeller family’s interests in Latin America, much less move into the new inter-American endeavors Nelson wished to pursue.
Nelson could never have anticipated how crucial that survey would be for Washington’s leadership of the upcoming First Inter-American Conference on Indian Life in Mexico or for the fate of tribal peoples in the Americas. He had not guessed its importance for his own “Hemisphere Economic Policy” when his birthday party was suddenly interrupted by a phone call. It was from White House aide James Forrestal. Could he come down to Washington? He was there the next day. Nelson Rockefeller’s political career had begun.
SETTING THE INDIAN STAGE
Three months earlier, when Cárdenas had appealed to the 400 delegates of the Inter-American Conference on Indian Life at Pátzcuaro, Cam could not help feeling anxious for the survival of the Good Neighbor Policy.
Here was his friend, the president of Mexico, pleading for justice for the hemispheres Indian peoples before the greatest assemblage of government experts on Indian affairs ever gathered in one place. It should have been a sympathetic audience. All the delegates were aware that what was at stake was the survival not only of the Indians of America, but, in the age of Hitler, of the democratic aspirations of the entire Western world.
And yet, as the delegates listened to the part-Indian president, the taut expressions on some of their faces gave a hint of the underlying conflict between the Mexican and American perspectives. Cam had hoped that by now Washington would understand the depth of Mexico’s resolve about controlling its own natural wealth—and paying its creditors at the same time. Two years ago, in a stirring oration before hundreds of thousands of cheering Mexican workers and peasants following Mexico’s expropriation of Standard Oil, Cárdenas vowed “to make it known to all the countries of the world, that Mexicans will honor their foreign debts.”14 And the Mexicans did.
“Checks were written in four figures from people who were not exactly wealthy,” Cam reported to his Fundamentalist brethren back home. “The poor came forward with their pesos. School children brought pennies. Women gave their earrings, bracelets, stickpins and odds and ends of value. Peasants brought chickens, pigs or vegetables.… I could not help but think that the executives of the petroleum companies might have seen the sight of barefoot Indians dropping a mite or two into the fund for economic redemption.”15
But Standard Oil had refused to accept compensation for a majority ownership of its Mexican holdings. It wanted to retain control. Cárdenas had broken Standard’s international embargo on Mexican oil by selling oil directly to Japanese companies. This action prompted Rep. Hamilton Fish to call on the floor of Congress for an invasion of Mexico. At Townsend’s personal request shortly after Nelson Rockefeller’s departure for New York, Cárdenas had delayed the sale until Standard’s response to a final appeal could be heard. The answer had again been negative.
Because of the U.S. embargo, Cárdenas had already begun selling oil to Germany. In principle, this was no different from the thriving business Standard Oil itself was doing with Germany. As late as 1939, Jersey Standard had favorably reviewed the cartel agreement it had signed in the 1920s and 1930 with I. G. Farben, a major backer of Hitler, and, in fact, renewed it in a secret meeting in Holland just as the war broke out. Worse, Junior’s long-time publicity adviser, Ivy Lee, had, at Standard’s behest, accepted Nazi money for advice on improving Hitler’s international image. Lee had recommended interpreting the Nazi rearmament program as a plea for “equality of rights” among nations and an effort at “preventing for all time the return of the Communist peril.”16
Standard’s apparent lack of aversion to Nazism, however, did not prevent the company from assailing Cárdenas for his barter agreement with Germany. The anger fomented by the conservative press in the United States had further chilled relations between the State Department and Cárdenas.
Cam and Ambassador Daniels were deeply worried about this cold war against Mexico. Rumors were circulating in Mexico City of covert manipulations by the oil companies in Mexico’s presidential campaign, then in full swing. Both men tried to reassure their respective religious and political networks back home of Cárdenas’s good intentions toward Roosevelt’s policy of Inter-American solidarity. Daniels wrote repeatedly to Roosevelt, praising his restraint, while reminding the self-righteous Hull that “we cannot properly object to such [Mexican] sale because the Standard Oil Company sold to Japan and Germany before the expropriation.”17
Shortly after the Inter-American Indian Conference, Cam published a daring pamphlet entitled The Truth About Mexico’s Oil. The pamphlet showed that much of his father’s prairie populism was still alive in Cam. “Cárdenas gave in [and sold oil to German companies] when he found that there were almost no buyers in the democratic nations that were sufficiently free from the control of the oil trusts to be able to bid for Mexican oil,” he argued. “We have no one but the oil companies to blame for this.”18
Ironically, the oil embargo, Cam noted, forced Cárdenas to initiate his own Good Neighbor policy to develop a Latin American bloc of support for Mexico’s territorial integrity and to procure markets for oil. Of the three nations involved, Bolivia was the most worrisome to the State Department. The military regime there had not only nationalized Standard Oil’s properties, but had close ties to European fascism. Its powerful Falange party was modeled after Mussolini’s Fascists. Mussolini’s army officers had settled in as official advisers to the Bolivian air force. And Bolivia’s only airline was German owned, which could give Hitler control over refueling stations and airdromes at the strategic point of intersection of South America’s air routes. It could also give him potential aerial control over the export of strategic minerals out of Bolivia’s highest plateau, the Altiplano, which had some of the world’s richest tin and copper mines and a network of attendant railroads vital to the Allied war effort. Nazi propaganda among overworked and underpaid Indian miners in the Patiño tin mines was making inroads; spreading strikes hampered production in 1940, threatening to cut off Britain’s tin supply.
Cárdenas’s concern for Latin America’s Indians was worrisome here, too. In March 1939, Cárdenas had sent a mission of linguists to consult Bolivia on its rural school system for Indians, who constituted more than 70 percent of the population. Bolivia responded by sending teachers to Mexico to study the system that Moisés Sáenz had initiated. It was not surprising, then, that when Bolivia, facing its own powerful pro-Axis lobby, decided not to honor its agreement to host the first Inter-American Indian Conference and General Jorge Ubico refused the Indianists access to Guatemala, Mexico’s invitation was readily accepted by Latin America. To Washington’s growing concern, most of the Western Hemisphere n
ow looked toward Mexico for leadership in the indigenismo movement.
AMERICA’S INDIANIST
BIA Commissioner John Collier drafted the proposal for this conference that was presented to the 1938 Pan American conference in Lima by the U.S. delegation headed by Hull and Berle. Collier characteristically underplayed his role. Like Cameron Townsend, his appearance was deceptive. A thin, stoop-shouldered man with often unruly brown hair and a corncob pipe in his mouth, Collier liked to wear comfortable baggy clothes. But these disarming features hid strong organizing skills motivated by a passion for reform and a vision of European social democracy transplanted to America through the American Indian. He had devoted his life to public service, eventually focusing his attention on the plight of the Indian. After Roosevelt’s election, his friendship with the new interior secretary, Harold Ickes, a charter member of Collier’s American Indian Defense Association, convinced the president to accept Collier as Ickes’s commissioner of Indian affairs.19
Collier’s tenure was a whirlwind of controversy. Collier forced through many changes in the BIA’s heavy-handed administration of the reservation system, including the Indian Reorganization Act of 1934. But some of his programs were arbitrary, and a few even bordered on the scandalous.
Thousands of Navajos had lost a primary source of income, clothing, and milk when Collier, at the behest of the Soil Conservation Agency, advised them to kill 400,000 sheep and goats to prevent further soil erosion on their lands.20 Behind the slaughter was a grimmer reality: the familiar greed of the white man. Commercial ranchers had refused to sell Indians land that had passed into their control since the breakup of tribal lands under the Dawes Allotment Act of 1887. Since the Navajo reservation could not expand enough, overgrazing by the herds was inevitable. The herds, in turn, impinged on the plans of agribusiness. Overgrazing had created such extensive soil erosion along the Colorado River that silt was undermining the usefulness of the new Hoover Dam for the irrigation and development of southern California’s Imperial Valley.