This matter was the subject of a preliminary conversation between Mr.
Beteta, Undersecretary for Foreign Affairs, and Mr. Boal, Counselor of
the Embassy, in the course of which Mr. Beteta suggested that the
substance of the Department’s objections to his Memorandum,
[Page 762]
(see Embassy’s Despatch No.
5811 of December 11, 1937),25 be given in writing, and indicated that after
studying these an effort would be made to suggest a procedure following
the terms of the Treaty and within its scope, which would be
satisfactory to the Mexican Government.
[Enclosure]
The American Ambassador (Daniels) to the Mexican Minister for Foreign Affairs
(Hay)
Mexico, January 13, 1938.
Excellency: I have the honor to refer to
the Memorandum of December 1, 1937,26 supplied to the
Embassy by the Foreign Office, regarding the settlement of General
Claims under the Protocol of April 24, 1934.27
I have the honor to bring to Your Excellency’s attention, under
instructions from my Government, certain points mentioned in the
Memorandum under reference, on which the Government of the United
States is not in agreement. For Your Excellency’s information, I
present below a statement of the differences of opinion on these
points, in order that consideration may be given thereto with a view
to our two Governments proceeding in this matter in accordance with
the obligations of Paragraph “Fifth” of the Protocol of April 24,
1934:
It is believed examination of the records of the Mexican Government
will disclose that in 1931 and 1932,28 when the discussions, which eventually
led up to the Protocol of April 24, 1934, were proceeding, the
contention of the Mexican Government was that all of the pending
claims, both general and special, should be settled by en bloc
agreements; that, in the absence of such agreements, there should be
but one further extension of time for the final disposal of all the
claims by means of pleadings, and that that period should be limited
to two years, with a possible extension, in case of extreme
necessity, to three years, and that the series of pleadings
necessary for the development of the cases should be curtailed as
much as possible, and that those claims which could not be supported
upon the merits should be withdrawn.
When negotiations were initiated for the purpose of concluding the
Agreement of 1934, the Government of the United States was, in
principle, in general agreement with the Mexican Government in all
those points, except that with respect to an en bloc settlement of
the
[Page 763]
General Claims, and
was of the opinion that it would not be possible to develop both the
general and special claims, even by a curtailed series of pleadings,
within three years. It seemed clear that an en bloc settlement of
the General Claims, under the circumstances then existing, was not
practicable, since neither Government could have a definite idea as
to the extent of its general liability, or that of the other
Government on such claims. Another difficulty was the insistence by
the Mexican Government at that time upon the numerous so-called
Texas land claims amounting to approximately $235,000,000.00, which
subsequent pleadings have shown to be invalid.
In the light of the foregoing, the en bloc settlement of the special
claims and the Protocol of April 24, 1934, were agreed upon as the
nearest possible approach to the wishes of the Mexican Government.
The Protocol embodied the principles which the Mexican Government
advanced, so far as concerns the matter of pleading General Claims,
and, in accordance with the desires of that Government, the time
allowed for the development of the cases was limited to about thirty
months, whereas, the time allowed the Commissioners of the two
Governments, for consideration of the claims, after being fully
developed, was greater than the maximum for which the Mexican
Government had contended, namely, more than three years.
The Protocol was concluded on April 24, 1934, and the Mexican
Government decided in October, 1934, to retain as its General Claims
Commissioner Dr. Fernandez MacGregor, who was already familiar with
the claims’ work and, presumably, with the hundred or more cases
already pleaded. On October 19, 1934, the American Commissioner29 was appointed in pursuance of the
Protocol. Nevertheless, the final Report of the two national
commissioners was not filed until the end of October, 1937.30 Thus, under
the terms of the Protocol, the commissioners of the two Governments
were allowed more than three years for the consideration of the
remaining claims, after the cases had been completely pleaded for
their convenience, and after the elimination, by the two Agents, of
approximately 1,500 claims, which they did not consider supportable
on the merits.
Respecting the statement, in the Foreign Office Memorandum of
December 1, 1937, that the failure of the two commissioners to
decide—(more than 1,000)—all claims submitted to their consideration
was not due to any fault on the part of the Mexican Commissioner, it
may be said that, while there is no desire to place blame on any
particular individual, it is worthy of note that circumstances were
such that, as related below, representatives of the United States
Government have completed their study of the individual general
claims, and the
[Page 764]
Mexican
authorities apparently have not, or at least, did not decide them
with their American confreres, who were ready so to do.
In the conclusion of the Protocol, and in the development and
submission of the pending claims in pursuance thereof, the wishes of
the Mexican Government were observed, and the failure of the two
commissioners to consider and to agree or disagree with respect to
all the claims submitted to them, was not due to any unpreparedness
or unwillingness of the United States.
There are still pending some 1,100 claims which the two commissioners
did not discuss through no fault of the United States in the matter
of compliance with the theretofore expressed desire of the Mexican
Government that the claims be disposed of in a maximum of three
years.
Attention is invited to the fact that Paragraph “Fifth” of the
Protocol of April 24, 1934, provides that “upon the basis of” the
joint report of the two commissioners and “with the least possible
delay”, the two Governments shall “conclude a convention for the
final disposition of the claims, which convention shall take one or
the other of the two following forms, namely, first, an agreement
for an en bloc settlement of the claims wherein there shall be
stipulated the net amount to be paid by either government and the
terms upon which payment shall be made; or, second, an agreement for
the disposition of the claims upon their individual merits.”
The report of the two commissioners has now been filed, and the
obligation of the two Governments to conclude the convention called
for by the “Fifth” paragraph of the Protocol now rests definitely
upon them.
The Memorandum dated December 1, 1937, from the Foreign Office,
apparently contemplates some informal, ex-conventional, en bloc
negotiations, without any binding obligation on the part of the
Mexican Government in the matter of the conclusion of an en bloc
convention as the only alternative to umpire proceedings on the
pending claims. The procedure suggested in the Memorandum seems to
be based on the technical contention that since the two
commissioners did not succeed in discussing all of their cases, and
did not file written opinions in the cases not discussed, it would
be impossible in the event of failure to conclude such an en bloc
convention, to continue to the umpire proceedings because there
would not be available for submission to the umpire the separate
opinions of the two commissioners in the cases not discussed by
them.
The American Government cannot concur in the technical objections
just mentioned for the following reasons:
- 1.
- The American Commissioner has prepared his opinions in all
cases—those not discussed, as well as those decided.
- 2.
- During the pendency of the en bloc negotiations called for
by Paragraph “Fifth” of the Protocol, such opinions are
unnecessary and no provision for their use in such
negotiations was contemplated by the Protocol.
- 3.
- If it is the desire of the Mexican Government that such
opinions of the Mexican Commissioner be prepared for
submission to the umpire, in the event of failure to
conclude the en bloc settlement convention, ample time would
apparently be available for the filing of such opinions as
the umpire proceedings progressed.
- 4.
- It could not be conceded by the American Government, under
any circumstances, that the incompletion by the Mexican
Government of the tasks of preparation and discussion, in
order that there might be appraised all general claims
submitted, could constitute any proper basis for contending
that the obligations of the Protocol have been set aside, or
that the two Governments are now under the necessity of
proceeding to further negotiations respecting the pending
claims released from the obligations of either the
Convention of September 28 [8],
1923,31 or
the Protocol of April 24, 1934.
The Government of the United States considers it of great importance
to proceed to the conclusion of this long-pending matter precisely
in accordance with the obligations of the Protocol of 1934, which
was the result of several months of negotiation. It, therefore,
anticipates the cooperation of the Mexican Government in the matter
of concluding the convention called for by Paragraph “Fifth” of that
Protocol. To this end, it invites the Mexican Government to
designate a representative to confer with a representative of the
United States with a view to concluding, if possible, an en bloc
settlement.
If the Mexican Government is prepared to send such a representative
to Washington, the Government of the United States will be prepared
to share in equal proportions the expenses of the two Governments in
that connection.
It would be understood that the early negotiations contemplated would
not have any other character than that of compliance with Paragraph
“Fifth” of the Protocol of April 24, 1934.
Please accept [etc.]
