411.12/1535: Telegram

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

190. Referring to my telegram No. 110, June 18, 5 p.m., 1932.

Minister Téllez informed me Thursday, November 3, that he could not accept the proposed sum for en bloc settlement.
He handed me a small list of arbitral proceedings, including Mexico’s recent arbitrations with other governments, the percentage of recovery of which he averaged at 461 [4.61?] percent.
Yesterday November 4 I called his attention to the fact that his list was small and included small recoveries only; showed him the studies we had made (Howell tables); called attention to the fact that our own average of all experiences was 10.037 percent (table 5); that average experience of the world, other than United States was, so far as we could secure data, 20.0412 percent (table 6); and offered to discuss with him percentages of recovery with a view to discovering whether our proposed percentage (actually approximately 10 percent, as it worked out for amount asked) was too high.
While not specifically saying he would not discuss question, he gave me to understand he did not care to do so, and said several times it was impossible for him to consider 10 percent.
Am sending full report by mail.
There is some reason to believe his position is required by political situation here. A strong sentiment appears to exist, particularly in congressional circles, against paying awards already obtained and against agreeing to pay anything more on claims.
I am informed by the German Minister that the Mexican Government has defaulted on payment of German awards; he also tells me it has also defaulted on payment on awards to all other countries.
Minister of Treasury Pani has apparently acquired an unusual amount of self-assurance due perhaps to his success in currency inflation without any untoward results to date and he seems to be exercising considerable influence in administration circles.
. . . . . . .
I thought I detected some regret in attitude of Minister Téllez regarding inability to proceed on en bloc settlement though I may be in error.
I await Department’s instructions regarding further proceedings on en bloc settlement. There may be some advantage in allowing matter to rest where it is for the present.