812.6363/1614: Telegram

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


280. Department’s telegrams 274 December 12, and 277 December 14.50 In an interview at noon today with the Minister for Foreign Affairs I adhered closely to the contents of your number 274. I spoke first upon the petroleum bill and then upon the memorandum of December 5 concerning the bill to regulate section 1 of article 27, the Arizona and Illinois statutes not having a retroactive character, and finally impressed upon him the numerous proofs of friendship the Mexican Government had received from the United States, the continuance of the embargo on arms being included. I only referred to articles 14 and 15 of the petroleum bill as being contrary to the decisions of the Supreme Court of Mexico as well as the formal declaration of policy of the Mexican Government made to Messrs. Warren and Payne in 1923. I also referred to the obvious contradiction between the provision of the bill for the regulation of section 1 of article 27, by which foreign corporations are forbidden to acquire concessions in combustible minerals, and the provision of the bill which requires that petition must be made for confirmation of rights to the subsoil previously acquired.

The Minister for Foreign Affairs disclaimed special knowledge of matter which, he said, was in the jurisdiction of the Department of Industry. He stated that the Mexican Government did not admit that the bill was retroactive and confiscatory, but that the regulation of the industry for the benefit of all interests was absolutely necessary and that it would eliminate the possibility of continued individual interpretation of the law. I asked him whether he did not consider a law as confiscatory and retroactive which limits the ownership of property guaranteed by a decision of the Supreme Court as a vested right. He stated that power to enact such law was vested in Congress and that such law was analogous to the exercise of police power. The position of the United States was reiterated several times by me that this project of law and the bill for the regulation of section 1 of article 27 of the Constitution were confiscatory and retroactive and that the views of the United States Government were brought to the attention of the Mexican Government while the bills were pending to prevent, if possible, development of a situation by which the cordiality of the relations between the two Governments might be adversely affected. In regard to this he expressed appreciation of our friendly [Page 551] motive and he stated that the President had authorized him to say that his Government fully reciprocated this sentiment and that it was determined that nothing should be done which might jeopardize the cordiality of the relations between the two Governments.

The Minister for Foreign Affairs stated that Ambassador Téllez had informed him that he had had a similar conversation with the Secretary of State; and he wished me to advise you that, with regard to your expression of anxiety to Téllez concerning the pending legislation, you need not be disturbed, that the situation remained in statu quo, that all denouncements of mining properties made by individuals before 1917 would be respected, and that all those made since then had been effected under the provisions of the Constitution of 1917 through permits granted to individuals upon petition.

I emphasized our desire to prevent the development of an unfavorable situation by making representations concerning the pending legislation. His attitude was conciliatory and he promised to call attention of the appropriate authorities to today’s exchange of views.

It is probably too late for a formal note to affect the situation, as the pending petroleum bill will probably be passed by the Senate today with slight modifications.

That your conversation with Ambassador Téllez had produced good Results here was evident from the Minister’s attitude, and the Mexican Government seems to desire to avoid an issue at this time. I do not believe that the two bills, the bill regulating section 1 of article 27 of the Constitution and the petroleum bill, can be made innocuous on account of the pressure in Congress. It is my opinion that the Executive branch of this Government seems to be disconcerted by our recent representations.

There seems to be no need at this time to reply to the Mexican memorandum of December 5, but if either of these bills becomes law, I believe that a formal note should be presented promptly to prevent, if possible, passing of the other bill.

  1. Latter not printed.