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

Sir: Enclosed is the original and one copy of a note addressed by me under date of October 30th to the Mexican Secretary for Foreign Relations. You are instructed to deliver this note immediately upon its receipt, and to advise me by telegraph of the date and hour of delivery.

I am [etc.]

Frank B. Kellogg

The Secretary of State to the Mexican Minister for Foreign Affairs ( Sáenz )

Excellency: The note of Your Excellency, dated October 7, 1926, has received most careful consideration, and I have the honor to submit the following reply:

My Government observes that the Mexican Government, while contending that the retroactive character of a law may not of itself, in advance of actual confiscatory or otherwise injurious effects when applied, give rise to objection or be the subject of diplomatic representations, reiterates its adherence to the fundamental principle that acquired rights may not be impaired by legislation retroactive in character or confiscatory in effect.
My Government likewise notes the unqualified adherence of the Mexican Government to the fundamental principle that rights of property of every description legally acquired are to be respected and guaranteed in conformity with the recognized principles of international law and of equity.
My Government has not failed to appreciate the gravity of the situation arising from the position taken by the Mexican Government with respect to the negotiations of 1923. As my previous communications to Your Excellency have amply explained, the declarations of the Mexican and of the American Commissioners on that occasion, subsequently ratified by an exchange of notes between the [Page 670] two Governments, constituted, in the view of my government, solemn and binding undertakings which formed the basis and moving consideration for the recognition of the Mexican Government by this Government.
After a further review of the entire correspondence, and especially after a careful examination of Your Excellency’s note of October 7, 1926, this Government finds no occasion to modify any of the positions which it has heretofore taken, and desires to be understood as maintaining those positions with the utmost emphasis. Although they have all been clearly set forth in my previous communications, and therefore need not be here restated, I deem it appropriate, in the light of the tenor and effect of Your Excellency’s last note, to emphasize again the reservation made by the American Commissioners and formally stated on the record by the Mexican Commissioners, acting in behalf of their Government, at the meeting of August 2, 1923, and to recall to mind the passage on that subject appearing in Your Excellency’s note of March 27, 1926.

My purpose in engaging upon this correspondence relating to the land law and the law concerning the rights to certain products of the subsoil was, in a spirit of genuine goodwill and friendliness, to point out so clearly as to leave no room for misunderstanding, the extremely critical situation affecting the relations between the two countries which would inevitably be created if those laws were enacted and enforced in such manner as to violate the fundamental principles of international law and of equity, and the terms and conditions of the understanding arrived at in 1923. That purpose has been fulfilled, the issues have been plainly defined, and my Government in conclusion reasserts that it expects the Government of Mexico, in accordance with the true intent and purpose of the negotiations of 1923, culminating in the recognition of the Government of Mexico by this Government, to respect in their entirety the acquired property rights of American citizens, which have been the subject of our discussion, and expects the Mexican Government not to take any action under the laws in question and the regulations issued in pursuance thereto, which would operate, either directly or indirectly, to deprive American citizens of the full ownership, use and enjoyment of their said properties and property rights.

Accept [etc.]

Frank B. Kellogg