File No. 812.63/179

Mr. S. C. Neale to the Secretary of State


Sir: Referring to my letter of June 2, last,2 in which I brought to your attention, upon behalf of the Committee of American and Foreign Owners of Mines and Smelters, the deplorable situation in Mexico and the arbitrary and confiscatory manner in which the de facto Government was acting in respect to American investments in that country, I beg to submit to you certain facts in connection with the property of the Cubo Mining and Milling Company, of Guanajuato and the Mina Mexico Mining Company of Sonora, from which it is apparent that as to the Cubo Mining and Milling Company, of Guanajuato, there is a practical confiscation [Page 723] of the property of that Company, and there is threatened confiscation of the Mina Mexico Mining Company, of Sonora, both caused by the unwarrantable and illegal action of the officials of the de facto Government.

By the decree of General Calles, herewith enclosed and made a part of this letter, it will be noted that the operation of mining properties in the State of Sonora, whether owned by Mexicans or foreigners, must be commenced one month from the date of the decree, which was published in the Boletin Official, May 27.

While my clients have been unable to secure a copy of any decree which the Governor of Guanajuato may have issued, he is evidently on record as authorizing the denouncement and operation of mining properties that are not being operated, as shown by the following translation from the issue of El Democrata, of May 16, 1916:

The Chairman of the City Council at La Luz, Mr. E. Sanchez, authorized by General Jose Siurob, Governor of the State, has invited all residents of that rich ore district to denounce all those mining properties that are not in product because their owners have suspended working them or have abandoned them, in order that they be distributed in camps to be exploited by men willing to do so.

Also the representative of the authority has invited all merchants and farmers out of the district to return and contribute to the prosperity of the district.

As it is well known, the exploitation of mines in the way of camps results in the equitable distribution of the products and is of great advantage not only for the miners but for all working people.

It is safe to predict a brilliant future for Guanajuato if the people will follow the idea of General Siurob, made known to us through the Chairman of the City Council at La Luz.

I wish to impress upon you most earnestly and to call your special attention to the fact that these arbitrary acts of the Governors of Guanajuato and Sonora are not the acts of revolutionists or bandits, but officials of the Carranza Government and it must be presumed are acting in consonance with and deriving their authority from the de facto Government.

I respectfully ask that this important matter be brought to the attention of the Special Representative of the Department in Mexico, with instructions directing him to present, at once, the case to the de facto Government, insisting that the wrongs which I have indicated in this letter shall be promptly remedied and that no further effort shall be made by the de facto Government to interfere with the property rights of the Cubo Mining & Milling Company and the Mina Mexico Mining Company of Guanajuato and Sonora respectively.

I am [etc.]

S. C. Neale

decree no. 56

General Plutarco Elias Calles, Governor and Military Commander of the State, in use of the faculties with which I find myself vested through the First Chief of the Constitutionalist Army in power of the Executive of the Republic, and considering:

That the triumph of the Constitutionalist Revolution has been consummated, from a military standpoint, in all the National Territory, except for very reduced and insignificant exceptions, and (consummated) in an absolute manner in the State of Sonora which is controlled by the Revolutionary Government: [Page 724] that since the Federal Government through my Executive has extended to the mineral enterprises and industrials guarantees and necessary securities for the exploitation of their business, and to this end, by means of repeated official circulars, has exhorted the various enterprises, as quickly as possible, to commence the work of exploitation, in the manner and extent demanded by circumstances: that it is public knowledge that many of the enterprises remain as yet unexploited because, solely, of combinations financial and political among the owners who are not concerned in the moral side of their procedures: that in view of the situation, because it obstructs the State and the Nation, exploitation of the industries is of public and urgent necessity; and for this reason, it becomes necessary for the Executive to dictate radical remedy upon this affair, without in any manner opposing the principles of justice and equality: I have seen fit to (decree) the following:

Article 1. The exploitation of the mineral business and industries is of public utility in the State.

Article 2. There is given to the owners or companies of said enterprises, whether they be Nationals or foreigners, the period of one month, counting from the publication of this decree, to commence the work of operation of their properties or industries.

Article 3. If at the end of the period fixed by the previous article the said industrial enterprises have not been placed in a state of exploitation, with a force of at least one hundred workers as a minimum, the State shall have the right to take charge, temporarily, of the administration of those (properties) which it so judges, the necessary public declaration in the Periodica Oficial sufficing as notice. Those properties or industries which have not operated previously, or which have not employed previously one hundred workers in their labor, can employ a less number, with the approval first of the Executive.

Article 4. The same power of intervening will hold in the State in regard to properties or industries which are actually in exploitation at present, and which suspend their operations for more than eight days, without a justifiable motive or permission of the Governor.

Article 5. Upon the State taking charge of the administration of a property or industry, in accordance with the previous articles, the first political authority in the locality (of the property) accompanied by honorable citizens of the same locality, will carefully take in duplicate an inventory of the furniture and existing appurtenances of it (the property). One copy of said inventory will be sent to the Executive, and the other to the party interested if he solicits it.

Article 6. The products of the enterprises taken over in virtue of this law shall be subjected, first for the payment of the federal and local taxes which pertain to the property or industry; if no production is made, the taxes referred to shall be demanded from the owner of the enterprise, according to the respective laws.

Article 7. Upon the arrival of the time for returning to the respective owners the properties or enterprises intervened, the State will render an account for payment of its administration, making delivery within a period of fifteen days of the products obtained.

Article 8. If by reason of the actions of the owners or companies a property is returned to them by the State before exploitation has been commenced, but when already the State has made distributions in it (the property), they (the owners) shall reimburse the State for the amount of said distributions within a period of fifteen days following.

This decree will take effect from the day in which it is published.

General P. Elias Caixes

Lic. Enrique Moreno

Secretario de Estado
  1. Not printed.