411.12/1473: Telegram

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

114. Referring to the Department’s telegram No. 84, June 22, 7 p.m., 1932 and also to the Department’s instruction No. 284, June 20, 1931; Department’s telegram 301, November 9, 5 p.m., 1931.23

I had the initial interview with Minister Téllez regarding en bloc settlement yesterday and explained fully and frankly our method of computing amount of probable recovery and named 50 million dollars as “take it or leave it” sum.
I also explained that in the event of en bloc settlement we would not make pro rata distribution among all claimants but we would establish domestic commission to pass upon all claims and make awards where commission found liability; that we would expect Mexico to furnish evidence as requested by us for use in determining validity of claims; and that we would agree to turn back to Mexico such part if any of the 50 million dollars as was not needed to satisfy awards already made, with interest, plus awards made by domestic commission.
I asked him to suggest terms of payment for consideration by the Department.
Minister Téllez made two observations after saying he could express no definite views until he had opportunity to study matter.
that his advisers would take position that a domestic commission would be more liberal in the awards than an international commission to which I replied that our own experience seemed to be otherwise.
that the terms of payment should be such that Mexico could meet them; that they already had defaulted three times on their [Page 755] agreements with the bankers; that he thought this was bad for Mexico and that he did not wish to add another agreement upon which Mexico would default.
As I was leaving he expressed the hope that the Department could do something about the Ardmore cases24 without too much delay.
I urge that arrangement be made for Colonel Moreno to remain here until this negotiation for en bloc settlement is either terminated or advanced to its final stages. Please advise.
  1. Latter not printed.
  2. Shooting of Manuel García Gómez and Emilio Cortéz Rubio; see Foreign Relations, 1931, vol. ii, pp. 708 ff.