File No. 612.119/1152
[Enclosure]
Summary of an editorial from “El Pueblo” March 14,
1918
The editorial states that it had not so far discussed the so-called
Nieto agreement which was such a dismal failure, in order not to
disturb the renewed discussions between Secretary for Foreign
Affairs Aguilar and Ambassador Fletcher, but now it is forced to do
so because of the attitude of a certain newspaper which eulogizes
Nieto and promises to discuss his proposed arrangement. Before
explaining the reasons for this malicious newspaper campaign, an
outline is given of the reasons which justified President Carranza
in refusing to sanction Nieto’s arrangement.
The outline follows:
In Clause 1, the provision that the Bank of the Mexican Republic will
issue bills to be received by the Government in payment of taxes and
contributions is strictly of an internal and not of an international
nature. “Is this an explanation, a mandate, or a condition?”
Clause 2 is the vital point in the question.
It makes us a financial agency of the United States; our bank,
according: to this, is an American institution, whose reserve
funds are in the United States, and whose credit depends or the
pleasure of the United States. The deposits, represented by our
bills, are handled by foreign hands, and are dependent on the
eventualities of our foreign affairs. These reserves are a
credit in favor of Mexico—which will not see the actual
money—and are funds in the possession of a distrustful and
susceptible enemy who can apply them as an indemnity for any
real or supposed damage, or for any other purpose.
Clause 3 condemns Mexico to a constant lack of metallic currency,
which cannot be remedied until peace is ratified, and even this is
subject to the course of events, because, as regards the excess over
$10,000,000, “the Mexican Government desires assurances that the
United States Government will not place any difficulties in the way
of its exportation.” That is, the United States does not compromise
itself in this respect, as the Mexican Government only desires that
it be done, and the desires of one party to an agreement do not
obligate the other party.
In exchange for these ten millions and the other five referred to in
Clause 7, Mexico obligates herself to cancel laws which protect her
metal production; Mexico can only import such gold from the United
States as it pleases that Government to permit to be exported
(Clause 5); and finally (Clause 6), the United States is assured
that no gold exports will be made by Mexico and so reach the
enemy.
Summing up: The project does not solve the problem and for fifteen
millions belonging to Mexico which she is allowed to receive, Mexico
is placed in a humiliating position.
Our bank is not our bank, but a branch which we are permitted to
manage in an administrative way only, because its funds, which
constitute its strength, are in the possession of the Federal
reserve banks.
Mexico did not beg for anything. It is a question of a nation giving
in exchange for what she obtains, and at present Mexico gives raw
materials for the war to the Allies; that is, oil, henequen, metals,
lumber, etc.
