812.52/604: Telegram

The Secretary of State to the Chargé in Mexico (Summerlin)

54. Your despatch 3753, March 21, agrarian bill, State San Luis Potosi.

Consideration bill reveals its ambiguity in important respects, for instance, right of land owner to make private division, provision for payment by State, for fixing value of improvements, and for preserving rights of creditors.

No effective compensation is provided since bill taken in connection with provisions Article 117, Mexican Constitution,95 regarding [Page 480] bond issues by States, apparently requires land owners to accept non-negotiable State bonds, payable in Mexico, and in Mexican money, which would seemingly have no market value, and owners of which would be remediless in case of default, except through diplomatic channel, and would be exposed to danger of being compelled to accept payment in depreciated fiat money.

No provision is made for fixing value of improvements by judicial determination as required by Article 27, Mexican Constitution. Therefore, and since measure provides for taking property by purely arbitrary administrative action without due process of law, or judicial determination, measure violates Article 14 of Constitution.

Measure does not meet provisions for protecting owner in expropriation proceedings, which prevail in United States, and generally, as in accordance with justice and equity.

Communicate foregoing to appropriate authorities, and, on behalf of interested American citizens, make informal protest against passage of measure in present form.