The Ambassador in Mexico (Sheffield) to the Secretary of State
[Received January 20—1:40 a.m.]
25. This morning a United Press correspondent informed me that he had asked the Foreign Office whether it had any comments to make on your reported statement regarding arbitration. He was told that the Government of Mexico would be glad to submit pending questions to arbitration. This statement was authorized by the Minister for Foreign Affairs personally. I have learned from another source that the Foreign Office exhibited much satisfaction when it heard of your suggestion.
Today the Chief of the Diplomatic Bureau stated informally to this Embassy that the question of whether the provisions of article 27 of the Constitution were retroactive and confiscatory would not be submitted to arbitration by the Government of Mexico; that the Government of Mexico would not admit the right of any foreign authority to pass upon the legality or validity of the internal laws of Mexico; but that the Government of Mexico would be glad to submit to arbitration concrete cases involving American rights.
It is felt among well-informed American circles here that your reported acceptance of arbitration will have a tendency to relieve the Government of Mexico of the embarrassment which has existed since your firm Nicaraguan policy was made clear, and will encourage the President of Mexico in his antiforeign policy.