File No. 812.6363/376
Until the Mexican Congress shall pass the necessary regulating act to
give effect to this article of the Constitution, the question of
expropriation of legally acquired private rights may remain
academic, although the recent petroleum decree (see my despatch No,
815 of March 1, 1918), it is claimed, attempts to apply Article 27
without waiting for the regulating legislation.
This opinion of Mr. Rouaix is valuable as showing the arguments on
which the Mexican Government will defend its position. The article
in question is being bitterly attacked by a large section of the
Mexican people and is becoming more and more unpopular as its
far-reaching effect, if put into practice, is appreciated. It is not
likely that any attempt to pass a law to give effect to this article
of the Constitution will be made at the forthcoming special session
of Congress, and that nothing along this line will be done until the
next regular session of Congress (beginning September 1) at the
earliest. Indeed, I think it quite possible that the Government will
find it very difficult, in view of the growing opposition to Article
27, to pass the required legislation in any Congress. I have the
honor to suggest, therefore, that the Department delay such
representations as it may have to make on the subject, until the
bills to put this article into effect seem likely to be passed by
the Mexican Congress, and then—perhaps in conjunction with other
governments whose nationals may be similarly affected—to invite the
Mexican Government to delay the proposed legislation until the
Mexican Government’s pretended right to expropriate private property
rights under the Querétaro Constitution may be submitted to
international arbitration.
Of course, if the present Government should seek to give effect to
this article without awaiting action by Congress—as it is claimed it
has done in the recent petroleum decree, but which I think open to
question—our Government might find itself compelled to act more
quickly.
[Enclosure—Translation]
The opinion of the Mexican Secretary of
Agriculture and Fomento (Rouaix)
as to the interpretation of Article 21 of
the 1911 Constitution of Mexico1
Dear Sirs and Friends: I have been
pleased to receive your letter of the 4th instant, regarding the
just and legal interpretation which should be given to the term
dominium directum as used by the
framers of the Constitution in Article 27 of our present
Fundamental Charta. I take pleasure in replying to the questions
contained in your letter.
I should state now that I consider myself sufficiently qualified
to answer the queries in your letter because, as you undoubtedly
know, I had the satisfaction in the Constitutional Convention to
be the initiator of the project of Article 27, having made a
primary study of the same in company with Messrs. José I. Lugo,
José N. Macías, and Andrés Moilna Enriquez (attorneys), and this
project was submitted for consideration to a group of delegates
who were making a special study of the so-called agrarian
problem. We, the initiators, took note during the discussions
which were held at my home, of the propositions and amendments
suggested by those present, and in this manner the project,
drafted in the form, of a bill, was signed by those who attended
the meetings.
Later, when the bill was sent to committee, I also had the
satisfaction of discussing with the members thereof, Messrs.
Francisco J. Múgica (general), Enrique Colunga (attorney),
Alberto Román (doctor), Luis G. Monzón, and Enrique Recio
(attorney), the amendments which were proposed in the
committee.
[Page 709]
In view of this, I believe that the opinion which I now give
reflects the ideas and spirit which inspired the group of
delegates who initiated the project, and I believe also that I
interpret the opinion of the committee which drew up the final
bill, which was approved by the convention with but few
changes.
I now reply to the questions addressed to me:
- 1.
- Did the committee over which you presided, and which
presented the bill covering Article 27 of the
Constitution, to the Constitutional Convention of
Querétaro, understand the term dominium directum to be equivalent to that of
“ownership”, or did it make a distinction between
them?
- 2.
- Should the terms dominium
directum and “ownership” not have the same
meaning, please state the difference.
The fundamental idea of Article 27 was to establish the principle
that lands, waters, and natural products obtained therefrom,
belonged to the Nation, which had the right to cede the dominium over them to private parties,
and thus create private property. From this are derived two
fundamental principles: The Nation has absolute and complete
original ownership over the entire territory and its products.
Private property is the cession which the Nation makes of the
right of dominium over lands and waters
in favor of any person, but this, without losing its
prerogatives to which, as owner, it is entitled. This principle
is established in the first part of Article 27, which says:
The ownership of lands and waters comprised within the
limits of the national territory, is vested originally
in the Nation, which has had and has, the right to
transmit title (dominium) thereof
to private persons, thereby constituting private
property.
And this principle is made complete in specifying the rights
which the Nation continues to hold, when it says that:
The Nation shall have at all times the right to impose on
private property such limitations as the public interest
may demand as well as the right to regulate the
development of natural resources, which are susceptible
of appropriation, in order to conserve them and
equitably to distribute the public wealth.
The above answers the first and second questions of your letter,
and defines clearly what the Constitutional Convention
understood by ownership and what it meant by dominium, be it directum,
utile, or otherwise.
3. In declaring that to the Nation belongs the dominium directum of solid mineral
fuels, oil, and all hydrocarbons, solid, liquid or gaseous,
was it or was it not the intention of the convention to
reclaim for the Nation the ownership which it always had of
these substances?
With regard to the subsoil products, the Constitutional
Convention desired that the rights of the Nation should be more
strictly defined, and for that reason employed the term dominium directum, thus expressing
clearly that, as regards this class of riches, the Nation
possessed not only absolute and original ownership over them,
but also private ownership. This is distinctly expressed in the
paragraphs which I quote below, from which it may be seen that
the dominium of the Nation—that is, the
complete ownership which it has of those products—is inalienable
and can not be laid aside, and only by means of concessions and
under certain conditions may it cede the use of the said riches
to private persons. The Constitution says:
In the Nation is vested dominium
directum of all minerals or substances which in
veins, layers, masses, or beds constitute deposits whose
nature is different from the components of the land,
such as minerals from which metals and metaloids used
for industrial purposes are extracted; beds of precious
stones, etc. … solid mineral fuels; petroleum and all
hydrocarbons, solid, liquid or gaseous.
In the Nation is likewise vested the ownership of the
waters of territorial seas …
In the cases to which the two foregoing paragraphs refer,
the dominium of the Nation is
inalienable and may not be lost by prescription;
concessions can be granted only by the Federal
Government to private parties or civil or commercial
corporations organized under the laws of Mexico, on
condition that said resources be regularly developed,
and on the further condition that the legal provisions
be observed.
[Page 710]
4. Was it or not the intention of the convention to
consider the dominium directum
over mineral fuels, petroleum, and hydrocarbons, solid,
liquid and gaseous, as equivalent to the dominium directum which the
Nation has always held over the other minerals mentioned
in Article 1 of the present mining law?
This was the intention of the convention. In including petroleum
among the minerals without making any distinction, it is clear
that it is placed in the same class and under like conditions as
minerals, in so far as the ownership of the Nation is
concerned.
5. Did the committee which drew up the bill covering Article
27 of the Constitution understand that Article 2 of the
present mining law was annulled by giving to the Nation dominium directum over all mineral
fuels, petroleum and other hydrocarbons of whatever physical
properties?
Without doubt. The Constitution being the supreme and fundamental
law, its simple publication annuls all laws opposed to it, even
though its effects on the matter affected may be retarded until
the issuance of governing regulations, but the principle it
opposes is destroyed immediately.
6. Was it the intention of the committee, so worthily
presided over by you, in presenting the bill covering
Article 27 of the Constitution to the Constitutional
Convention at Querétaro, that there shall or shall not
continue to exist the disputable rights which private
parties believe they possess over petroleum and other
hydrocarbons existing in the subsoil of their lands?
As I said before, the effects which the annulment of a law may
produce may be retarded until the regulations governing are
issued, and, therefore, in the case of petroleum, those who held
ownership over the land at the time the Constitution was
proclaimed, may continue to hold possession thereof until the
issuance of the laws which prescribe the manner in which the law
shall be applied; and that is precisely what has taken place to
date, in that the Federal Government has not endeavored to alter
the usage of such products with relation to the manner in which
they were formerly used, but from the moment the Constitution
was promulgated, the legal ownership of petroleum and other
hydrocarbons was returned to the Nation.
7. In reclaiming under the new Constitution the rights of the
Nation over solid mineral fuels, over petroleum, and over
other hydrocarbons, solid, liquid, or gaseous, does or does
not this produce retroactive effects?
This question, or better said, the argument regarding the
retroactive effects of the Constitution, has been used by all
the enemies of the Revolution, presenting it with more or less
ability, but always in the nature of a great sophism.
It is known that the real rights, from the juridical point of
view, which the Nation has over the territory and its products,
are based on the rights which were taken over from the Crown of
Castilla with regard to the territory of New Spain. The Spanish
Monarch was vested with the rights of ownership of the lands,
waters, minerals, and liquids of the ground, and for that reason
he was the only one empowered to grant the usufruct of the
riches and the ownership of the lands to his vassals. This is
the fundamental principle of the Nation’s ownership. After the
declaration of independence, the rights of the Crown of Spain
passed to the Nation, which was the successor of the Royal
Spanish Crown, and, therefore, the Nation has been the one to
continue giving titles to lands which had not been ceded, and
granting concessions to mines which had not been denounced. Thus
it is that the principle of ownership existed first and
primarily in the Kings of Spain, and later in the Nation.
Now, referring exclusively to the question of petroleum, it
suffices for me to cite the paragraphs which I transcribe, in
order to justify the rights of the Nation over these fuels.
The Royal mining orders of the year 1783, Title 5, Article 1,
say:
The mines are the property of my Royal Crown, not only
because of their nature and origin, but by their
inclusion in the Fourth Law, Title 13, Book 6 of the new
Recompilation.
[Page 711]
And Article 2, under the same title says:
Without separating them from my Royal Patrimony, I grant
them to my vassals in ownership and possession, in such
manner that they can sell, exchange, rent, donate, or
leave as a heritage under testament or mandate, or in
any other manner dispose of their rights thereto, under
the same conditions as they are possessed and to persons
who are able to acquire same.
This principle does not leave room for doubt as to the intentions
of the King of Spain, to grant only the dominium utile to the mines, and it is clearly
expressed by the words with which the article opens, i. e.,
“without separating them from my Royal Patrimony …”
Among the substances which are included in the general terms
“mines” and which can be denounced, are included the
hydrocarbons, called at that time bitumens, as will be seen from
the following paragraph taken from the same orders, Article 22,
Title 6, reading:
I also grant permission to discover, solicit, register,
and denounce in the manner stated, not only gold and
silver mines, but also those of precious stones, copper,
lead, tin, quicksilver, calamine stone, bismuth, rock
salt, and any other fossils, either perfect metals or
semi-metals, bitumens, or earth juices, granting money
and labor for their development, in the provinces where
they exist.
This is what came to form afterwards, the indisputable right of
the Nation over these riches, which legally can not be destroyed
by a simple law, because in this case, as in that of lands and
waters, the question is that of certain rights which are
fundamental in the Constitution of the Nation, and which are the
basis on which the subsequent rights of the Mexican Governments
were established. Therefore, no retroactive effect exists in
Article 27, as all it does is to recover and reconstitute the
fundamental ownerships of the Nation, which one of its rulers,
without right, endeavored to cede to private individuals.
Retroaction would have existed had there been demanded an
indemnity of those who, without right, were exploiting the
natural subsoil products covering all they had enjoyed in
usufruct prior to the promulgation of our Magna Charta. This was
not done, but its provisions tend to reclaim for the Nation that
which belonged to the Nation.
Trusting to have answered your inquiries, I am [etc.]
