812.5200/40: Telegram

The Ambassador in Mexico ( Sheffield ) to the Secretary of State

223. Department’s telegram 240 October 29, 7 p.m. I saw the Minister for Foreign Affairs yesterday afternoon and was received by him with entire courtesy and friendliness. I informed him that I had come for the purpose of requesting information regarding the purport of the bill sent to the Chamber of Deputies September 30 last regulating the first section of article 27 of the Federal Constitution and that I had not come to enter into any discussion of the matter. He said that the bill had been substantially modified since its introduction and intimated that for this reason discussion at this time might be inopportune. Having pointed out that the purpose [Page 526] of my visit was merely to elucidate certain obscure points I proceeded to put to him the questions raised in section 2 of your telegram mentioned and received the following answers.

With regard to question I (a) and (b), the period within which foreigners may divest themselves of real property interests within the prohibited zone whether held directly or through a Mexican corporation will be extended probably to 10 years but such divestiture must be effected regardless of the time when the interest was acquired.

With regard to question II (a), interests of foreigners in corporations in excess of 50 percent acquired before the proposed law becomes effective will be respected. Question II (b), the declaration to be made regarding the interest held by foreigners in real property outside the prohibited zone will not be directed specifically to the renunciation of rights as an alien but will be designed to determine the character of alien ownership with a view to recording necessary information regarding alien holders of such interests.

With regard to question III, article 4 of the bill is not intended to have retroactive application.

With regard to question IV, article 5 of the bill has been modified in affirmative terms to the effect that foreigners may acquire not to exceed 50 percent ownership in companies for agricultural purposes and will not have retroactive effect. The declaration contemplated by the second half of article 6 will also be descriptive merely to obtain necessary records of ownership by aliens.

With regard to question V, the proposed law is merely designed to regulate section 1 of article 27 of the Constitution and does not affect the stipulations of section 4 of article 27, which latter has to do among other things with subsoil deposits.

The Minister explained that the general purpose of the proposed law is to obviate complications with foreign governments resulting from the application of agrarian laws to real property owned in fee by aliens or by corporations owned by aliens and that it has no bearing upon industrial mining and other nonagricultural corporations which latter will still be able to acquire, own and administer the lands necessary for their establishments and for the services necessary for carrying out their objects having in mind of course the concession principal so far as subsoil deposits themselves are concerned.

I understand in brief that the proposed law will not be in conflict with the provisions of section 4 of article 27.

[Paraphrase.] I agree with the Department that a formal note should not be presented at this time. I should add that during the past few days a substantial change of attitude in the Government [Page 527] has been noted, and this fact has made it easier for me to secure the above information. [End paraphrase.]