711.1211/31

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

No. 2044

My Dear Mr. Summerlin: It is my desire to leave nothing undone to promote friendly relations with Mexico and to bring about an early and satisfactory solution of existing questions. To this end I have considered most carefully the reports of your conversations with Mr. Pani and especially his informal note, addressed to you under date of February 9, 1922.9 I have been hoping that proceedings would be taken by the Mexican authorities which would aid in clearing up some of these questions, but as nothing appears to have taken place which changes their aspect I shall review in detail Mr. Pani’s communication and ask you to address him, informally, in the sense of this instruction.

I am gratified to note that the Mexican authorities are disposed to sign immediately the two Conventions on Claims which they have proposed. There are provisions of these Conventions which would require special consideration, and I should have certain suggestions to make with respect to their tenor and scope, but I apprehend that there would be no great difficulty in reaching mutually satisfactory conclusions upon these points. I am also gratified to observe that it is recognized as entirely consistent with the friendship between the two peoples and compatible with a proper sense of national dignity, that recognition should be given concurrently with the signing of a treaty. This is the clear import of Mr. Pani’s suggestion with respect to the implicit recognition of the Government of Mexico in the signing of proposed Convention No. 1 relating to claims arising out of the Mexican revolution during the period between November 1910 and May 1920. All objection to recognition through the signing of a treaty apparently having disappeared, the [Page 647] only remaining question is, What shall the treaty be? Mr. Pani suggests that it should be simply the proposed Convention No. 1 as to claims. The Department of State has suggested that it should be the proposed Treaty of Amity and Commerce which contains provisions as to the adjustment of claims. I am indifferent to a mere matter of procedure and I have no objection to satisfactory conventions relating to claims being embodied in separate documents. I am, however, quite as much concerned with the importance of suitable assurances for the adequate protection of American citizens and their property rights as I am with the desirability of a convention as to claims; and I am unable to see any reason why assurance should be given as to the adjustment of claims and not be given in the same manner with respect to the protection of fundamental interests.

It will be quite satisfactory to this Government to have the Claims Convention, or Conventions, signed first, provided it is clearly understood that the signing of a Treaty of Amity and Commerce, with provisions previously agreed upon and put in draft form (as in the case of the Claims Conventions), shall follow without delay.

The question then is as to the appropriate terms of such a treaty.

Mr. Pani refers to the desire of the United States to be assured “that the rights acquired by American citizens prior to the governance of the Constitution of 1917 are adequately safeguarded,” and states that this desire is “quite explicable” but in the judgment of the Mexican authorities is “altogether satisfied in a practical and concrete manner—despite the absence of agreements or treaties—by the mere effects of the policy” which the present regime in Mexico has adopted. It is agreeable to observe that there is apparently no disposition to question the propriety of the purpose of the United States, as above stated, and it would be most gratifying to find in Mexican policy the adequate assurances which are desired. It cannot be forgotten that Mr. Venustiano Carranza gave the most explicit personal promises, on the basis of which his government was recognized, and that these promises were ignored and the execution of a confiscatory policy was decreed. While General Obregon has from time to time made statements manifestly intended to be reassuring, it cannot fail to be noted that these statements have been of a personal nature, and that there has been an utter absence of appropriate governmental action binding Mexico to afford that protection of valid titles which it seems to be admitted that the Government of the United States is entitled to ask. In view of this, I shall not undertake to review the course of the existing regime, or to demonstrate, as could easily be done, that, while in some cases confiscatory measures have been halted or postponed, in numerous other cases there has continued to be flagrant disregard of property rights [Page 648] of American citizens. Nor can it be considered strange or inappropriate that, in the light of events in Mexico during the past eleven years, there should be some better assurance than any mere temporary abstention from the prosecution of the confiscatory policies which had been officially avowed.

Neither the Executive, nor the Judicial, nor the Legislative Department in Mexico has taken appropriate action to establish, against the confiscatory policy which had been announced, the security of valid titles acquired in conformity with Mexican law prior to the Constitution of 1917. The Executive has disclaimed authority to give adequate assurances. There have long been pending before the Supreme Court of Mexico a number of cases which it is understood involve questions relating to the validity of proceedings threatening property rights and various points of the application of the Constitution of 1917, but, with the exception of one decision of a limited and inadequate character, these cases remain undecided and the questions involved are still unsettled. When it is remembered that it is provided by the Amparo Law of Mexico that the decisions of the Supreme Court of Justice shall “constitute jurisprudence, whenever what is decided is found in five decisions not interrupted by another to the contrary” it becomes evident that the desired assurance cannot be found in any judicial action.

The Congress, although the subject has long been under consideration, has not enacted an Organic Law regulating the application of the principles of Article 27 of the Constitution of 1917, and this is given as a reason for the lack of Executive action.

It is in the interest of friendly relations between the peoples of the United States and Mexico that there should be no misunderstanding as to the policy to be followed by Mexico in the future. If there is to be continued confiscation of property rights, this should be known. If property rights are to be properly safeguarded, there can be no objection to an agreement to that effect, and in view of what has taken place in Mexico it is manifestly fitting that such an agreement should be made.

Dealing with what Mr. Pani describes as the principal objections raised by the Mexican authorities to the acceptance of the stipulations in the proposed Treaty of Amity and Commerce, I may make the following observations:

First. Mr. Pani objects to the first paragraph of Article 1 of the proposed Treaty that “the citizens of each of the High Contracting Parties shall have liberty to … own or lease and occupy houses, manufactories, warehouses and shops … upon the same terms as native citizens, submitting themselves to the laws and regulations there established.” Mr. Pani points out that Section 1 of Article 27 [Page 649] of the Constitution of 1917 provides that only Mexicans by birth or naturalization “have the right to acquire ownership (dominio) in lands, waters and their appurtenances in the Republic of Mexico,” and that although the Nation may grant the same right to foreigners it may do so only upon stated conditions which are not required of Mexicans. Mr. Pani observes that under this provision of the Constitution the equality of treatment which the first paragraph of Article 1 of the proposed treaty would establish for Americans cannot be conceded.

In answer to this objection, it should be noted that the paragraph of the treaty above quoted does not refer to ownership of lands and waters. The “dominio”, to which Mr. Pani refers, is not involved, as it is recognized that Mexico may, if she chooses, exclude all foreigners from ownership of land within her borders so far as future transactions are concerned and provided that valid titles already acquired are protected. The proposed paragraph of the Treaty has relation not to the ownership of land but to freedom of trade and commerce and provides reciprocally that the citizens of each of the contracting parties may “enter, travel, and reside in the territories of the other to manage their affairs, to exercise their professions, to carry on trade, wholesale and retail, to own or lease and occupy houses, manufactories, warehouses and shops, to employ agents of their choice, to lease land for residential and commercial purposes, and generally to do anything incident to or necessary for trade upon the same terms as native citizens, submitting themselves to the laws and regulations there established.” This is a familiar provision, the limitations of which are easily established, and is not deemed to be in conflict with the constitutional provision.

Second. Objection is also made to the provision of the sixth (fifth) paragraph of Article 1 of the proposed Treaty that “property rights of whatever nature, heretofore or hereafter acquired by citizens of either country within the territories of the other, in accordance with the laws thereof, shall under no circumstances be subjected to confiscation, under constitutional provisions, legislation or executive decrees or otherwise.” Mr. Pani expressly recognizes that “generally speaking, this stipulation does no more than formulate the universal principle of respect for acquired rights, wherewith the Government of Mexico could do nothing else than be in accord.” Mr. Pani takes exception, however, to the insertion in the proposed Treaty of a provision “that confiscation—even if the Constitution decreed it—may not be carried into effect.” He urges his objection upon the ground that the constitutional provision would be effective as the supreme law of the nation and would [Page 650] have “to be respected above treaties.” In this connection he cites numerous authorities.

It is necessary to point out the distinction between domestic law and international obligation. It is, of course, true that a Nation may by its Constitution and laws override treaties, but by such domestic acts, however sanctioned nationally, it cannot escape its international duties and obligations. The fact that a Nation exerts its power through its organs of government to commit a breach of a treaty engagement in no way permits it to avoid the international consequences of such a breach.

It is not supposed that from the standpoint of international relations Mexico desires to reserve the right of confiscation, for this would be in disregard of what Mr. Pani properly calls the “universal principle of respect for acquired rights” and would place Mexico beyond the pale of international intercourse. And I assume that it would not be sought to be maintained that an engagement so completely in accord with universal principle would lie outside the range of the treaty-making power.

If Mexico binds herself not to confiscate property, manifestly any action she may take for the purpose of confiscation, no matter how the act is locally authorized, would violate her engagement. As this is not open to question, I have no desire to create difficulties by mere form of words and I am quite willing to leave the treaty with the absolute agreement that acquired property rights “shall under no circumstances be subjected to confiscation” without any mention of the particular form through which the confiscation may be sought to be effected, that is, to omit the particular phrase, “under constitutional provisions, legislation or executive decrees or otherwise,” to which Mr. Pani interposes his objection.

Third. The next objection which Mr. Pani raises is to the seventh (sixth) paragraph of Article 1 of the proposed Treaty, which stipulates that neither the Constitution of 1917 nor the Decree of January 6, 1915, to which the Constitution refers, shall have retroactive effect, and that all rights which had been acquired by Americans prior to the governance of the Constitution of 1917 shall be respected, including the ownership of sub-soil substances acquired in accordance with Mexican laws.

Mr. Pani says that “upon this question of the non-retroactive effect of Article 27” (of the Constitution of 1917), General Obregon “has already stated his opinion in a clear manner that all rights acquired legitimately must be respected.” But Mr. Pani adds that “until the Organic Law of Article 27 of the Constitution shall be promulgated, the signature of the President of the Republic, placed on an international treaty, which would fix interpretations of said [Page 651] Article, would be equivalent to an undue invasion of the exclusive sphere of the legislative power, since, although a constitutional text establishes a principle, its particular effects may only be determined by the Organic Law which regulates it, and this has still to be enacted by the Congress of the Union.”

I am gratified to note Mr. Pani’s confirmation of the view that had been entertained of the purport of General Obregon’s statements, but what Mr. Pani says, unfortunately, again directs attention to the inconclusive nature of these statements. As to the precise point that, in the absence of the promulgation of the Organic Law, the Treaty could not be signed because it would be an invasion, of the legislative power, it may be sufficient to say that I am not advised of any reasons for the delay in the enactment of such an Organic Law. This impediment to the execution of an appropriate treaty could readily be removed by the Mexican Congress. I am at a loss to understand, however, why such an impediment should be deemed to exist, inasmuch as under the Constitution of 1917 (Art. 89, Par. X), the President is expressly authorized “To conduct diplomatic negotiations and to make treaties with foreign powers, submitting them for ratification to the Congress.” There appears also to be a provision in the same Constitution (Art. 76, Par. I), authorizing the Senate “To approve the treaties and diplomatic conventions concluded by the Executive with foreign powers.”

Hence there would appear to be no reason under this objection for delay in the signing of the proposed Treaty unless it is supposed that the Congress of Mexico will insist upon a confiscatory policy, and if this be the case, it is necessary to say that such an attitude would be a bar to the resumption of diplomatic relations.

Fourth. The next objection is to Article 2 of the proposed Treaty, which refers to the religious liberty of the citizens of each of the contracting parties in the territory of the other, and provides that citizens of the United States in Mexico shall enjoy the same right to engage in religious worship and in all other matters appertaining to religion and education as citizens of Mexico enjoy in the United States.

Mr. Pani states that this provision could not be accepted by Mexico. I assume that Mr. Pani has in mind the provision of the Constitution of 1917 (Art. 27, Par. II) that “religious institutions known as churches, irrespective of creed, shall in no case have legal capacity to acquire, hold or administer real property or loans made on such real property” and that “all such real property or loans as may be at present held by the said religious institutions, either on their own behalf or through third parties, shall vest in the Nation, and anyone shall have the right to denounce property so held.”

[Page 652]

If this provision is regarded as retroactive, and thus in violation of the universal principle to which Mr. Pani has referred, it would seem to be clear that any taking of property by the authorities under this provision would have to be deemed an expropriation for which Mexico would be bound to make prompt and adequate compensation.

Mr. Pani says that the foregoing are the principal objections of a legal character which would be raised to signing the proposed Treaty and that “all the other articles of the Treaty in question could be accepted with slight variations, and the omission of those which refer to points embraced in the projects for the mixed claims commissions.” In this view, I should suppose that it would not be difficult to give to the United States the guarantees which are plainly appropriate.

I desire to have you again express informally to Mr. Pani, and through him to General Obregon, my desire, in the interest of the promotion of the most friendly relations between the peoples of the two countries, that these questions should be settled at an early date, conformably to the familiar and fundamental principles which govern the intercourse of friendly states.

I am [etc.]

Charles E. Hughes
  1. Supra.