File No. 812.51/442
The Secretary of State to the Ambassador in Mexico ( Fletcher)
Sir: The Department acknowledges the receipt of the Embassy’s No. 1228 of July 17, 1918, with which was enclosed a letter addressed to the Secretary of State by George W. Cook of Mexico City, relating to the law of payments, decreed by President Carranza, April 13, 1918, partly lifting the moratorium for the payment of money obligations.1
Reminding the Foreign Office of the representations made by your Embassy pursuant to the instructions contained in the Department’s No. 504 of April 4, 1918, relative to the law of payments decreed [Page 659] December 24, 1917, you will state to the Foreign Office that in the opinion of the Government of the United States certain provisions of Articles 3 and 9 of the law of payments of April 4 [13], 1918, are open to objection on the grounds set forth in that instruction, namely, that they amount to an impairment of the obligation of contracts, thus working an injustice upon creditors; that they are retroactive in character, and as such violative, to the detriment of creditors, of the prohibition of Article 14 of the Mexican Constitution against giving retroactive effect to any law to the detriment of any person; and that they deprive creditors of their property without due process of law, thus working, by way of confiscation, an injustice, and also violating the prohibition of Article 14 of the Mexican Constitution, against such deprivation of property.
You will add that the provisions so deemed objectionable are those contained in Article 3 of the law, attempting to make null and void express stipulations contained in the evidences of certain obligations to make payment in metallic money, and the provisions contained in paragraph 2 of Article 9 of the law, with respect to the obligations entered into during the period of metallic money, that interest which accrued thereon from August 1, 1913, to November 30, 1916, inclusive, shall be considered to have accrued in paper money.
You will also inform Mr. Cook of the nature of these instructions, and say that the Department presumes that it is his intention to pursue his legal remedies with regard to such of his transactions as may be affected by the said law of April 30 [13], 1918.
I am [etc.]
- Not printed.↩