Papers Relating to the Foreign Relations of the United States, 1927, Volume III

312.115 Ol 41/21: Telegram

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

Washington, April 7, 1927—3 p.m.

84. Your despatch 3775, March 4, 1927. The Department has discussed with Mr. Oliver and his attorneys the response made by the Mexican Government to your aide memoire of February 15 regarding the Oliver case, and has received from them further information which it believes might advantageously be discussed with the Mexican authorities. You are therefore authorized at your earliest convenience orally to discuss this case again at the Foreign Office along the following lines provided you see no objection:

1. Point out that this Government is gratified that the President of Mexico in suspending the operation of the decree of expulsion against Mr. Oliver has given such unmistakable evidence of the desire of the Mexican Government to remove the obstacles which have been depriving Mr. Oliver of an opportunity to arrive at an adjustment of his case.

2. State that this Government does not desire to pass upon or discuss the merits of Mr. Oliver’s case, or to become involved in a discussion of the litigation in 1921 in the Mexican courts, but, as stated in your memorandum of February 15, 1927, is interested in having this case adjusted.

3. Refer again to the helpful and sympathetic reception which the Department afforded to the requests of the Mexican authorities during the pendency of the litigation in the courts in the United States, and outlined in your aide memoire of February 15.

4. Point out that helpful as the action of the President has been in suspending the expulsion decree, it does not completely meet the situation. State that according to the information which has been furnished to the Department by Mr. Oliver it appears that the Mexican authorities through their attorneys in New York engaged in negotiations with Mr. Oliver in 1922 and 1923 looking to the friendly settlement of the case of the Oliver American Trading Company, and that a proposed plan of settlement was approved by the President of Mexico and communicated by Mr. Pesqueira to Mr. Felix, the Financial Agent of Mexico in New York, in a telegram dated December 22, 1922. A copy of this telegram was given by the attorneys for the Mexican authorities to the attorneys for Mr. Oliver, and was taken by the latter to constitute a clear indication of the desire of the Mexican authorities to settle the case. A copy of this telegram and an affidavit by a member of the firm of attorneys who represented Mr. Oliver in these negotiations have been submitted to the Department.⁹⁵ From this evidence it appears that the arrangement consisted of two parts, first, an agreement that that portion of the Oliver Trading Company’s claim which was susceptible of exact proof (amounting to about $700,000) was admitted by the Mexican authorities and would be paid without further question upon submission of the necessary vouchers, and second, that the remainder of the claim (amounting to about $350,000) which was composed of unliquidated items for damages sustained from loss of future business, loss of good will, et cetera, would be submitted to arbitration. Although the Department understands that this arrangement was effected by duly authorized representatives of the Mexican Government, namely, Messrs. Hardin and Hess, and was relied on by Mr. Oliver’s attorneys in consenting to the extension of time requested by the Mexican authorities, its provisions have never been carried out.

5. Point out that in view of these negotiations which took place after the litigation in the Mexican courts in 1921, to which the Foreign Office memorandum referred, and in view of the statement contained in the telegram of December 22, 1922, to the effect that the Mexican authorities “must endeavor to arrive at a reasonable settlement with the Oliver Company in order to prove not only the good faith and just attitude of our Government with regard to this claim which has indisputable grounds, but also to take advantage of the settlement for the establishment of a precedent in the courts,” the Mexican Government might be disposed to waive technical considerations and authorize its attorneys or financial agent in New York to take the matter up with the attorneys for the Oliver American Trading Company at the point where it was left in 1923. You may state that such action would undoubtedly facilitate the settlement of the question on its merits and would be welcomed by the Government of the United States as further evidence of the desire of the Government of Mexico to see that justice and equity are done to Mr. Oliver and the Oliver American Trading Company.

6. You should make it clear that the Government of the United States, while not passing upon the merits of Mr. Oliver’s claim or espousing it as a diplomatic claim, is bringing it to the attention of the Mexican authorities in this informal and friendly way because it appears to be a case calling for consideration by the Government of Mexico in some appropriate manner.

7. For your information and such use as may seem appropriate the Department quotes below the text of a translation of the telegram of December 22, 1922, from Pesqueira to Felix referred to above:

“The President has resolved that Roberto V. Pesqueira take charge of the Oliver case according to the following memorandum approved by him: ‘The claim of the Oliver Trading Company is at present in the Federal Court of the United States of America. The plan the government proposes to carry must take place before the sixth of January and accordingly it is necessary to act immediately for on this date a judgment will be entered by default unless some definite course of action is previously decided and approved upon. The Oliver Trading Company and its lawyers have shown their desire to enter into negotiations with a view to effect a settlement, provided the negotiations are started upon a reasonable basis. They wish that assurances be given to them that the attitude of the Government will be to discuss the subject in good faith so as to settle the claim of the Oliver Trading Company and that it is not our purpose to enter into discussions with the sole view of gaining time. My opinion is that we must endeavor to arrive at a reasonable settlement with the Oliver Company in order to prove not only the good faith and just attitude of our Government with regard to this claim which has indisputable grounds, but also to take advantage of the settlement for the establishment of a precedent in the Courts. A precedent of this nature would be of great help in all future litigations that might arise. Therefore I propose the following method: That I represent the Government. The Oliver to name a good meaning representative as for example General Ryan who already has expressed his willingness to accept. The arbiters will carefully study the disputed points under the advice of their lawyers and will endeavor by amicable discussion to find a just basis of settlement. Once this basis has been determined the matter will remain pending until the suit of the Oliver Trading has been taken to the Federal Court and a favorable sentence has been entered on the protest made by the Government through the Department of State. We propose to obtain a verdict whereby the court declares itself incompetent to try a suit against the United Mexican States. This naturally would be of great advantage to us inasmuch as otherwise it would be very difficult for us to obtain a precedent of this nature with the promptness this one affords. Such precedent would also tend to prevent the presentation of other claims by persons who may have intentions to try alleged claims before the courts.’ Please communicate with Messrs. Harding and Hess.”

Kellogg

95. Affidavit not printed.