File No. 812.5167159

The Secretary of State to Mr. Parker, representing American interests


654. Your 657. You are instructed to say to the appropriate Mexican authorities that the Government of the United States, as the sincere friend of Mexico, and after careful consideration of the de facto Government’s procedure against the National Bank of Mexico and the Bank of London and Mexico, views with grave apprehension the apparent purpose to force into liquidation these institutions, in which so many French, British and other nationals are deeply interested as stockholders, and in which many Americans are depositors; and that this Government feels that it would be negligent morally if it did not solemnly advise the de facto Government against a course which appears to leave out of consideration the principle recognized and firmly established by modern nations, that foreigners owning property within the jurisdiction of a friendly power are entitled to the protection of the Government of such power.

It is believed that if the most conservative and ably managed financial institutions anywhere were required to comply with such banking decrees as were recently issued in Mexico, during abnormal times, or even at a time of only temporary disturbance of the financial market, it would be practically impossible for them to do so. In the case of the banking institutions of Mexico, where the country has been suffering from abnormal conditions for the past four years, which have most seriously affected all lines of business, with the resultant unbalancing of economic conditions, it would seem to be a measure of confiscation to exact of these institutions the fulfilment of requirements which would be exceedingly difficult to comply with, even if the country were far more nearly in a normal state.

It appears to be established that the concessions of these banks were granted in accordance with Mexican laws, by a regularly constituted Mexican Government. It appears, further, that a Mexican commission, acting under a decree dated September 29 last, investigated the affairs of the National Bank of Mexico and found that it [Page 1008] had fulfilled the requirements of its concession, and that the concession could not be forfeited. Notwithstanding, it has been stated to this Government that the de facto Government is proceeding to force into liquidation these institutions, without affording them any recourse whatsoever to vindicate their rights.

The situation of the banks has been brought to the attention of the President, and he states that the manner in which these institutions are being treated by the de facto Government leaves little doubt in his mind that the powers whose nationals are affected have real ground for grave complaint. The President, therefore, directs me to lodge a friendly but serious protest against the continuance of such treatment.

The Government of the United States sincerely hopes that the de facto Government will not fail to give heed to this Government’s solemn advice and protestation in this matter, and it trusts that the apparent decision to abolish the institutions mentioned will be promptly reconsidered, and that as a result, a course of action will be adopted strictly in accord with the dictates of right and justice, as it is only by such a course, this Government is convinced, that the de facto Government can avoid unpleasant developments in its foreign relations. Wholly aside from the considerations mentioned, it would seem that the de facto government, as a matter of self-interest, would refrain from action looking to the wrecking of the strongest financial institutions functioning in Mexico, which, if properly safeguarded, would doubtless exert a powerful influence in the greatly needed financial rehabilitation of the country.